11/09/2012

Facebook: Bernstein Pitches Roadshow Questions

The circus has come to down, and it is the Facebook initial public offering roadshow. Last Friday apparently saw co-underwriter JP Morgan‘s lobby festooned with banners saying “Welcome, Facebook!” while today the company’s investor meeting in New York was a jam-packed affair, a source tells me, with perhaps a thousand people trying to get into the Sheraton Hotel.

It appears that the centerpiece of today’s presentation was basically a movie shown to investors, which you can check out on the company’s Web site here.

In advance of the festivities, Bernstein Research’s Carlos Kirjner sent a missive to clients advising of eight things they might want to ask the company about should the happen to participate:

  • What are the barriers to speeding up revenue growth, and why haven’t advertisers moved faster to spend on the site? That’s a topic of particular interest given that the revised IPO prospectus last week showed an 8% drop in ad revenue from the prior quarter.
  • How is the company going to balance further “monetizing” the site while maintaining the “experience” of users? The company has to “strike the right balance,” he insists.
  • What’s founder Mark Zuckerberg think about “shareholder value” given that he’s the controlling shareholder?
  • What will be the effects of consumer privacy and regulation?
  • “Will Facebook offer improved discovery mechanisms to allow users to find new objects and applications across the Social Graph?”
  • What was the valuation the company used to come up with its $1 billion purchase price for Instagram?
  • How will rising use of mobile devices affect existing desktop use of Facebook?
  • And as Facebook gets deeper into mobile, will have to start to pay a “traffic acquisition cost,” or TAC, to mobile operators, the way Google (GOOG) does to get its ad revenue?
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