Facebook Practices Its IPO Pitch On Wall Street

All day Friday, Facebook management will get an opportunity to practice its IPO pitch in front of a captive audience: its three lead underwriters, and the entirety of their sales teams.

Morgan Stanley, JPMorgan Chase, and Goldman Sachs — will host “teach-ins” for their equity sales teams during the day Friday to become experts on all-things-Facebook, according to people familiar with the matter.

Morgan Stanley holds the coveted “lead left” bookrunner position on the deal, so its meeting will start first thing in the morning, around 8 a.m. ET. A meeting follows at JP Morgan, where the bank has rebranded for the day with giant posters and a Facebook flag to welcome the team properly. The day will end at Goldman Sachs.

JP Morgan declined to comment on the meetings. Goldman Sachs and Morgan Stanley did not return calls seeking comment.

Facebook has selected 33 banks to underwrite the massive deal, which would value the company up to $96 billion. A price range of $28 to $35 per share would net the social network proceeds of $5.6 billion and $10.6 billion total for the deal, according to its most recent regulatory filing.

Hundreds of personnel — including marketing experts and institutional equity salespeople of all rank and specialty — are expected to attend each meeting, these people said. Because of the unprecedented and broad client interest in the deal, educating everyone “who might get a call on the name” is paramount, one of these people said.

The top-bank troika extended invitations to select individuals from some of the remaining banks as well, since touring 33 banks in a day would be infeasible, one of these people said.

Facebook will face a tougher audience starting Monday, when it kicks off the formal roadshow and meets investors from coast to coast. Coming off tepid first-quarter earnings and a disclosure in the most recent filing acknowledging that active user growth will “decline over time,” investors certainly will challenge the company’s rich valuation.

In an official roadshow presentation posted on RetailRoadshow.com, chief financial officer David Ebersman said the company would continue to invest heavily in mobile — where Facebook has nascent development — even if “monetization is uncertain.”

Facebook will price its offering on May 17 after the market close, and its trading debut on the Nasdaq will be the following day.