Facebook CEO Mark Zuckerberg faced his first shareholders meeting in what has
been a rocky ride for company investors.
Facebook's meeting comes after the company last month celebrated the one-year anniversary of its public debut, a sobering reminder of the overhyped IPO and its dampening effect on public markets.
Many retail investors have been burned while insiders have exited with tidy profits. Individual shareholders lined up to complain of their lost fortunes and to question the company's bungled handling of the offering. "We understand that a lot of people are disappointed in the performance of the stock, and we really are, too," Zuckerberg said in a pre-emptive statement.
Among those seeking answers was a woman who said her grandson told her to wait after buying in the $42 to $43 range. Many pressed with questions on the company's strategy at the meeting in Millbrae, Calif. The meeting was streamed on the Web.
The executive gathering follows heated privacy concerns fueled by reports of leaked documents suggesting the social network and other Silicon Valley giants provided server access to the National Security Agency.
"No agency has any direct access to our servers," Zuckerberg said. "We basically give the minimum amount of information that we need to comply with the law."
Shareholders approved the slate of items including the re-election of board members Zuckerberg, Chief Operating Officer Sheryl Sandberg, venture capitalists Marc Andreessen and Peter Thiel, Netflix CEO Reed Hastings and three others. Venture capitalist Jim Breyer announced plans in April to step down.
Facebook faced a barrage of questions about such topics as the threat of Google+, the rising popularity of photo-sharing sites, privacy in the wake of the NSA flap and ongoing concerns over the stock price.
"This isn't a zero-sum game," Zuckerberg said of Google's rival social network.
Facebook has posted solid quarterly revenue gains above 30% since going public. And the company has successfully maneuvered to meet members' mobile demands to gain revenue there, a steady refrain from Zuckerberg to shareholders.
Yet investors have grounds for agitation: Shares of Facebook remain roughly 40% lower than the $38 IPO pricing as insiders sell stock.
"The company still has a market cap in the vicinity of $60 billion, and if it wasn't for the fact that it had gone public at a market valuation of $104 billion, it would be viewed as wildly successful," says Jay Ritter, a finance professor at the University of Florida.
Shares of Facebook closed 1.2% lower at $24.03 Tuesday after the shareholder meeting.
After Facebook's IPO landed with a thud a year ago, it put a damper on consumer-related Web offerings in late 2012 and early this year.
But since its infamous face-plant, Facebook has rebounded nicely. Despite the rap against Internet companies as money-losing stocks, the social network has been profitable the past two quarters.
That's been aided in part by it serving up mobile users migrating from desktops. "Clearly, some of the ad units that Facebook offers fit well into the mobile environment. That's pretty good news," says Forrester analyst Nate Elliott.
Last month, Facebook rang up $1.5 billion in revenue for its first quarter, 38% higher than it was in the same quarter a year ago.
Facebook's net income of $219 million was 6.8% better than a year ago. That's above the 5% earnings growth reported by Standard & Poor's 500 companies in the first quarter, says S&P Capital IQ.
Facebook's financial upturn, in great measure, is a reflection of its burgeoning mobile business -- not to mention growth in all areas, says tech analyst Greg Sterling.
Marcio Jose Sanchez, AP
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