Investors hoping to get a slice of Facebook’s much-anticipated initial public offering shouldn’t expect to get too close to the technology phenomenon’s leader Mark Zuckerberg, according to The Wall Street Journal.
He failed to appear at a meeting of analysts and bankers at Facebook’s Menlo Park, Calif., headquarters, Monday, according to the newspaper. When investors asked about his absence the company’s chief financial officer, David Ebersman, said Zuckerberg “preferred to focus his time on developing the service rather than play a role with such analysts,” according to the report.
While senior Facebook executives reportedly told the Journal that no decision had been made on the role Zuckerberg will play in the company’s preparation for its IPO, one Facebook executive reportedly told the newspaper the youthful CEO doesn’t expect to play a hands-on role selling the social network’s stock offering to analysts.
The company is also planning to pay a below average fee to underwriters of the stock sale, the Journal said. The 1.1 percent fee that underwriters are expected to receive would be just half the average fee for deals of $5 billion or more in the past five years, the Journal reported.
Facebook may be able to offer the low fee because of the huge leverage the IPO has, according to observers.
“Facebook has enormous leverage,” Dan Veru, who oversees $3.6 billion as chief investment officer at Palisade Capital Management LLC in Fort Lee, N.J., told Bloomberg News.
“Being an underwriter of an IPO that has so much visibility is like advertising to other companies that are considering using an investment banker. It’s like putting your name in neon lights,” he added.
Facebook’s IPO is one destined for the history books, set to be the biggest technology company IPO in history and bring in at least $5 billion. It is expected to be completed around May.
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