When Facebook’s investor roadshow began yesterday, CEO Mark Zuckerberg’s work was cut out for him.
The first thing future shareholders in New York wanted to know was this: what’s up with Instagram?
Instagram, the photo-sharing service that Zuckerberg personally vetted and acquired for $1-bln last month, has been one of the more controversial (and seemingly impulsive) moves by the 27-year-old founder. To a packed audience (a ballroom accommodating 400 attendees), Zuckerberg defended his decision by pointing out that with 40 million users, he believed Instagram had crossed a certain user data “tipping point.” He added that he would go through with the deal again if he had to.
In his trademark hoodie, jeans, and sneakers, Zuckerberg fielded questions about the company’s long term goals. CFO David Ebersman whore a suit and COO Sheryl Sandberg was in a black dress. One of just five questions was about building a better venue model as user base grows, particularly on smartphones. Another was about the company’s planned expansion to China, the “world’s largest internet market” according to Reuters. Sandberg noted that Facebook executives would be willing to sit down with Chinese government officials to discuss partnerships.
Zuckerberg will maintain 57 per cent of voting control. Some analysts have pointed out that Zuckerberg’s central role in the company is a huge risk factor for many investors.
Facebook is expected to value shares at $28-35, raising $10.6-bln at their much anticipated IPO on May 18. This will value the 8-year-old company at $96-bln.
May Jeong is Toronto Standard’s business editor. Follow her on Twitter @mayjeong.