Facebook Inc.’s initial public offering has so far generated lower-than-expected demand from institutional investors who are concerned about the company’s growth prospects, people with knowledge of the matter said.
Some investors expressed reluctance after Facebook said on May 9 that advertising growth hasn’t kept pace with the increase in users, said the people, who asked not to be identified because the process is private.
Facebook is also telling analysts that sales may not meet their most optimistic projections, two people said.
Facebook executives have another week to market the IPO, which is scheduled to price on May 17, and underwriters are stepping up efforts to drum up interest from large would-be shareholders in the coming days, one person said.
Chief Executive Officer Mark Zuckerberg plans to raise as much as $11.8 billion through the IPO, the biggest in history for an Internet company.
Lackluster interest from institutional investors at this stage could compel the company to rely more on buying from retail investors. The company could still elicit enough demand to sell shares at or above the high end of a projected range, people said.
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