Facebook held a secret IPO “kickoff” meeting yesterday, in which it brought all its bankers and analysts together to meet company management and learn about the company.Normally in these meetings, the bankers are the kings of the castle: They introduce excited-and-slightly-nervous company managers to all the magic money people who are about to make them rich.
The company managers give their presentations and hope that the assembled bankers and analysts think well enough of them that they will wave their magic money wands and make investors want to buy their stocks.
But not Facebook.
Facebook doesn’t need bankers to wave any wands.
Facebook, for that matter, doesn’t really even need bankers, except to act as travel agents and concierges while a couple of Facebook execs jet around the world to chat with some big-time investors in a few weeks.
Because everyone already wants to buy Facebook’s stock.
And don’t think Facebook doesn’t know that.
Photo: Business Insider / Matthew Lynley
Facebook COO Sheryl Sandberg and Facebook CFO David Ebersman did talk with the bankers and analysts at the kickoff yesterday. Sandberg and Ebersman handle Facebook’s business and financial affairs, and they do a great job at it, so it’s not as though the bankers were completely deprived of face time with stars.But Facebook CEO Mark Zuckerberg didn’t bother going to the meeting.
Well, for one thing, because he had better things to do–like making Facebook a better product.
And, for another thing, because Mark Zuckerberg doesn’t give a crap about public-market investors, money, and going public. As Facebook’s long delayed IPO has made clear, Facebook’s only going public because it has to. Also, more importantly, As Zuckerberg himself said in his letter to prospective investors in Facebook’s IPO prospectus, Facebook views its “business” as a way to fund its product, not the other way around.
And, by the way, that’s a good thing.
More companies should think that way.
More companies should put their products first and their investors second. Not just because products are more important. Also because, as other great CEOs like Jeff Bezos understand, that’s actually the best way to create the most long-term value for shareholders.
According to Randall Smith and Shayndi Raice of the Wall Street Journal, who wrote about the kickoff meeting, Facebook has yet to make a decision about whether Mark Zuckerberg will participate in the IPO “roadshow” in which Facebook’s management spends a couple of weeks on the road meeting with big institutional investors.
Facebook’s bankers and investors will probably argue that Zuck has to participate–after all, he’s the company CEO and he’s going to be asking these investors to give him $5-$10 billion of their capital to help build his company.
But the truth is that Zuckerberg doesn’t have to participate. And participating would probably be a waste of his time.
Sheryl Sandberg and David Ebersman are extraordinarily impressive, charismatic, and talented executives. Mark Zuckerberg has already delegated Facebook’s business and IPO selection process to them, with great results. And he should now delegate the IPO marketing and public-investor communications to them as well.Mark Zuckerberg has done an exceptional job of building and running Facebook over the last eight years–not just in building the product, but in hiring an amazing senior team to build the business. Thanks to the majority control Mark has over Facebook’s voting stock, moreover, Facebook still is and always will be a “Mark Zuckerberg production.”
So as much as bankers and investors and other money folk may want to think that they’re in the driver’s seat here, they aren’t. And will never be. (And, frankly, given the frantic speed and impatience with which most public-market investors buy and then dump stocks, they don’t deserve to be. You can’t claim to care about long-term value when you bail at the slightest hint of trouble in quarterly results.)
At Facebook, Mark Zuckerberg’s in the driver’s seat.
Facebook’s stock will sell itself, with or without Mark Zuckerberg. And, whatever happens next, Facebook’s public-market investors will just be going along for the ride.
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