The IPO roadshow has been around for decades. It is where a company’s management travels across the U.S. — and sometimes to other countries — to make presentations to institutional investors. It can be grueling (how’d you like to give the same presentation more than 100 times), but underwriters like Goldman Sachs (NYSE:GS) and Morgan Stanley (NYSE:MS) demand it.
This week, though, the tradition has added a new wrinkle. Facebook’s co-founder and CEO Mark Zuckerberg seems to think the process is a waste of time — and it has Wall Street flustered.
Zuckerberg did attend the launch of the roadshow Monday in New York. His entrance looked like a president’s arrival, with black SUVs, security detail and reporters clamoring for comments. But Zuckerberg was late, and he used most of the time to play a video presentation, taking just a few questions afterward. Things took a turn for the worse yesterday, though, when Zuckerberg blew off the roadshow’s Boston stop altogether.
As one would expect, criticism followed. Michael Pachter, an analyst at Wedbush Securities, thought that Zuckerberg is showing signs of “immaturity” … but the statement was lobbed at Zuck’s fashion choice to don a hoodie in New York.
It’s hard to take in a remark like that without laughing out loud. What does that have to do with evaluating an investment? Did investors care that Apple’s (NASDAQ:AAPL) Steve Jobs always wore a black turtleneck? No. They were too enthralled with their huge returns.
But, of course, like any lackey sell-side analyst, Pachter has already put an outperform on the Facebook stock, with a price target of $44.
Zuckerberg has been an impressive leader. Since creating Facebook in his dorm in 2004 — which took a couple weeks to code — he has turned it into a global powerhouse boasting more than $4 billion in revenues (for 2011). How often does that happen?
Never.
So do investors really need to do a Q&A with him to figure out Facebook’s worth? Again, the concept seems laughable. Facebook has a S-1 that provides extensive information about the company, and the financial disclosures do not have any funky Groupon-esque (NASDAQ:GRPN) accounting. And it’s not hard to get info on Zuckerberg, who is one of the most famous people in the world. Read up about him in Time’s Person of the Year profile.
Zuckerberg knows how to deal with criticism. The Social Network wasn’t particularly complimentary, and millions of Facebook users saw that. You think he cares what Wall Streeters think? He just wants to spend time making Facebook stronger.
But, hey, if disgruntled investors insist on seeing Zuckerberg do a song and dance, that’s fine — they can pass on the deal. I’d be glad to take their shares.
Tom Taulli runs the InvestorPlace blog IPO Playbook, a site dedicated to the hottest news and rumors about initial public offerings. He also is the author of “The Complete M&A Handbook”, “All About Short Selling” and “All About Commodities.” Follow him on Twitter at @ttaulli or reach him via email. As of this writing, he did not own a position in any of the aforementioned securities.
