Facebook executives skipped their visit to Denver today as part of their pre-IPO roadshow, as demand for shares intensified.
The social-networking company's underwriters told area institutional investors to come out to Palo Alto if they want to visit ahead of the initial public offering on Friday, said Ross Moscatelli, portfolio manager of the Westcore Growth Fund in Denver.
Itineraries obtained by investment advisory website IPO Boutique had the company visiting Kansas City this morning and Denver this afternoon. But those plans were apparently scrapped after last week's opening show in New York generated a storm of attention.
Facebook on Monday night lifted the price range for its offering to $34 to $38 a share, up from $28 to $35, according to a revised securities offering statement.
Demand is so strong that the company also is expected to sell an extra 50.6 million shares in its "over-allotment" beyond the the initial 337.4 million it was offering to the public, reported PrivCo, a website that tracks major private companies.
That new price range and larger offering should raise between $13.2 billion and $14.7 billion.
Facebook's decision to cut its roadshow visits short doesn't come as a surprise, said Sam Hamadeh, co-founder and CEO of PrivCo.
"If they are oversubscribed there is no reason for them to get on a plane," he said.
A spokeswoman for Facebook declined to comment.
Companies going public use roadshows to drum up interest in their shares and get their executives in front of big investors. It is a testament to Facebook's popularity that it has upended the traditional model of companies paying homage.
"Demand for the offering outside the United States was so strong that it could probably carry the offering several times over by itself," said Moscatelli, who had hoped to meet with the Facebook team.
Sovereign wealth funds and pension funds, typically long-term holders, have clamored for shares, leaving less for everyone else, including Moscatelli, who said his $75 million fund isn't among those getting an allocation.
He doesn't plan to make the trip out to California and is telling his team to look at whether it makes sense to buy Facebook shares after its offering.
Some portfolio managers and research analysts won't buy a new stock without getting the chance to look management in the eye, Moscatelli said.
A key question Facebook faces is whether founder and CEO Mark Zuckerberg is up to the task of running one of the world's largest public companies, he said.
Will he prove a technology visionary with strong management skills, ala Apple's Steve Jobs or Microsoft's Bill Gates, or will he fall into the larger camp of entrepreneurs who aren't executive caliber, or worse, go off the deep end.
If Facebook hits some rough spots in the months ahead, it may regret the stronger connections it failed to build face-to-face.
"You would have to argue it does create some incremental risk going forward," Moscatelli said. "Incomplete information creates more risk. But because the demand is so high, they aren't afraid."
Aldo Svaldi: 303-954-1410 or asvaldi@denverpost.com or twitter.com/aldosvaldi
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