Facebook’s initial public offering could value the social networking giant at close to $100 billion and a round of meetings have begun as the company prepares to unleash itself on the market. The first major IPO briefing for bankers and analysts took place last week, but someone was missing: Mark Zuckerberg.
The Facebook co-founder and CEO skipped the first meeting last week and ruffled feathers with what some are calling a “dismissive approach.”
“We don’t think that he should be hiding from the investors,” said Carin Zelenko, the director of the capital strategies department for the International Brotherhood of Teamsters. “He wants investors to put their money behind him, with the confidence in him personally, as the person who built this company and who’s going to lead it and control it. He should be accountable to those people who are investing.”
Zelenko certainly seems to have a point. Zuckerberg is the face of Facebook and his absence could send the wrong message to investors and potential investors with respect to how much the young man cares about the process.
“Investors are crazy to want to get in bed with a company where the guy who controls it doesn’t even pretend to care about the rest of the shareholders,” Greg Taxin of activist investment firm Spotlight Advisors. “That seems like a recipe for disaster. The risk is that a controlling shareholder so believes in his own vision and control that he’s going to be unwilling to take input from shareholders, or anyone else, or be much concerned about their well-being.”
Zuckerberg’s absence also has to call into question the co-founder’s involvement in the process going forward. The company hasn’t commented as to his participation in any other pre-IPO briefings or on quarterly earnings conference calls either, so that could mean that a precedent is being set here. What this perceived “lack of involvement” could mean to investors and potential investors remains to be seen, but it could have a negative impact on the IPO.
Some think that Zuckerberg’s time is better spent “running the company,” of course, but the CEO is no stranger to making public appearances and isn’t exactly reclusive.
If things continue to go well and Facebook continues to remain red-hot for investors, this “dismissive” approach may not matter all that much. But should things hit a few bumps in the road, Zuckerberg will need to make face-time for investors – especially if he expects them to fork over the green.