Facebook Inc. Chief Financial Officer David Ebersman is meeting with investors in New York today, a person familiar with the matter said, days before the lifting of a ban on stock sales by some of the company’s biggest shareholders.
Goldman Sachs Group Inc., Microsoft Corp. and other large investors that bought equity before the initial public offering will have freedom to sell their Facebook stakes starting Aug. 16. That’s after the lifting of limits imposed by underwriters on the sale of shares for a preset period after an IPO. The person with knowledge of the meetings declined to elaborate on the plans, which are private.
Through yesterday, Facebook tumbled 45 percent since the company sold shares at $38 in the May 17 IPO. Ebersman’s meetings give the executive a chance to tell investors why they should hang on to the shares or add to holdings even as the so-called lockup expires, creating the prospect of further declines. Facebook needs to do a better job outlining how it plans to generate ad sales from the growing slice of users who access the social-networking service on mobile phones, said Victor Anthony, an analyst at Topeka Capital Markets.
“Investors who bought into the IPO have lost billions of dollars,” said Anthony, who’s based in New York. “He needs to get out there and tell the story of how he’ll drive revenue growth.”
The shares increased 2.8 percent to $21.59 at 2:02 p.m. in New York.
Ebersman’s meetings were previously reported by CNBC.
Facebook results last month showed that second-quarter sales growth slowed to 32 percent from 45 percent in the first quarter. That was the slowest growth on record for the company.
Even before the IPO, concerns over growth began building. Facebook said in May that sales growth wasn’t keeping pace with gains in users on mobile. The company didn’t roll out its first mobile-advertising service until March.
Mark Zuckerberg, Facebook’s chief executive officer, is taking steps to make more money from mobile ads. During the call with analysts when the company announced second-quarter results, he said mobile is a key area of focus for the company. Mobile users, who make up more than half of the membership, are more active than counterparts who use only the desktop version.
“Mobile is a huge opportunity for Facebook,” Zuckerberg said.