Facebook execs hammered with IPO questions at first shareholder meeting
- 11 June, 2013 20:27
At Facebook's first shareholders' meeting, CEO and co-founder Mark Zuckerberg took it on the chin Tuesday from stockholders unhappy about last year's IPO.
While executives like Zuckerberg and Chief Operating Officer Sheryl Sandberg talked about the strides the company has made in the past year on mobile and advertising, there was one question they couldn't get away from.
What's happening with Facebook's stock price?
Before the question-and-answer portion of the meeting began, Zuckerberg tried to get out in front of the issue.
"We understand that a lot of people are disappointed in the performance of the stock, and we are, too," he said. "The question is, what are we going to do about it? We expect there will be fluctuations on how the public thinks we're doing... If we keep focused, my hope is that over the long term we will build the value that everyone hopes and believes Facebook will be."
That statement wasn't enough to satisfy a room full of stockholders.
As the Q&A segment of the meeting went from the expected 30 minutes to more than an hour, stockholder after stockholder kept coming back to the same issue of the troubled initial public offering and the still lagging stock price.
With an initial share price set at $38, some financial and industry analysts had expected the price to soar to $50, $60 or even $75 per share. That didn't happen.
The stock initially came out strong, trading at $42. However, then it quickly began to stumble, dropping to below $39 just 20 minutes after trading began. In the days and months after that, the stock continued to sink.
At 3:45 p.m. EDT today the stock was trading at $24.06.
One stockholder summed up the situation when she asked Zuckerberg how long she should hold on to her stock.
"My son encouraged me to buy," one unidentified woman said. "I have more than 8,000 shares. I have heard about Facebook. I don't know how to use Facebook but I own stock."
While she added that she knows Zuckerberg and his team are working hard, she bought the shares at $35 a piece and wanted to know how long she would have to wait for the price to rise.
Facebook executives told her they weren't comfortable offering her stock guidance, but they were all optimistic about Facebook's financial future.
Zuckerberg, though, circled back to the repeated stock questions and tried to reassure the shareholders.
"I think the stock price is kind of the theme of the meeting," he said. "Our strategy is to build great mobile experiences. Build great tools for third-party apps that people can use... If you look at the progress we've made over the last year, I think we have come far on those things... I believe over the long term we will build the most valuable company."
To do that, Zuckerberg said Facebook needs to be a mobile company. That, he added, is something they are succeeding with.
According to Zuckerberg, over the past year, the company has transitioned from focusing on the desktop to focusing on mobile users. And to show its progress, Zuckerberg reported that today 30% of company revenue comes from mobile apps, which is up from zero a year ago.
This article, Facebook hammered with IPO questions at first shareholder meeting, was originally published at Computerworld.com.
Sharon Gaudin covers the Internet and Web 2.0, emerging technologies, and desktop and laptop chips for Computerworld. Follow Sharon on Twitter at @sgaudin, on Google+ or subscribe to Sharon's RSS feed. Her email address is email@example.com.
Read more about social media in Computerworld's Social Media Topic Center.