“I’m a big believer in Facebook’s long-term position,” Hoffman, a partner at Greylock Investors, said in a wide-ranging conversation with journalist-turned-venture capitalist Michael Arrington at the TechCrunch Disrupt conference today in San Francisco. Hoffman was one of the earliest investors in Facebook, putting up $37,500 when the company had a valuation of $5 million.
“If it continues at this price, then it will be a good buy either now or at some point because I think that their ability to accomplish fairly significant things is unparalleled. I think people’s handwringing about not making money on mobile is an innovation problem that’s actually not that hard to solve. And I think the executive team there is actually very strong,” Hoffman said. “I’m very bullish on their future prospects.”
As for when he’ll buy Facebook shares, Hoffman said he’s waiting for the lock-up periods on insiders’ holdings to end so he can see how the “market responds” to the company.
Facebook’s management team — specifically CEO Mark Zuckerbeg and CFO David Ebersman — have been criticized for flubbing the IPO, offering too much shares in May at too high a price. Facebook went public at $38 a share, up from original plans to reportedly price the stock at $29 to $34, and is now trading at $18.81.
LinkedIn, which went public last year, also faced criticism, with investors saying the IPO price was too low. Hoffman said “it’s hard to know if you should have made different calls” because of the many variables to consider without the benefit of hindsight.
As for Facebook’s IPO flub, “It may have been inevitable. In part, they had unprecedented retail demand,” Hoffman said. “Not even Google had that level of insatiable demand around its IPO.”
Zynga ‘Didn’t Diversify Fast Enough’
Hoffman was also asked his thoughts on game maker Zynga, where he has
served on the board since Jan. 2008 along with CEO Mark Pincus. Zynga
went public in December at $10 a share, but after disappointing
quarterly results and what investors viewed as on over-reliance on the
Facebook platform for its revenue, the San Francisco-based company’s
shares have plummeted. They closed at $2.82 today. Last month, chief
creative officer Mike Verdu announced his departure – one of several
high-profile executive exits over the summer.“On the positive column, I think the social gaming space is still very interesting. Zynga has the best position. Mark has the kind of very fast creative side which is useful” to this market, Hoffman said. “On the negative side, they didn’t diversify the platform fast enough so that when they hit some bumps, the bumps hit them.”
“They have a really interesting network of games that allows them to launch new games but you have to launch games in the right time frame,” he added. “I think the path forward is relatively straightforward for the company in order to get back into good graces and Mark is committed to making it happen.”
Marissa Mayer ‘A New Hope’ for Yahoo
Hoffman also said Yahoo made the right choice in selecting former Google executive Marissa Mayer as its CEO on July 16.“It’s definitely a new hope,” Hoffman said. “One thing was really good about the Yahoo board did in selecting Marissa was selecting a product person. I think at these technology companies, the strategies are inherently driven by product and so you need someone who is inherently a product person – engineering degree, focused on product, focused on design.”
He hopes Yahoo’s board gives her the one to three years she will need to turn the company around.
http://www.forbes.com/sites/connieguglielmo/2012/09/10/linkedins-hoffman-says-facebook-shares-will-be-a-good-buy-ipo-debacle-may-have-been-inevitable/
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