Why I'm thrilled Mark Zuckerberg is annoying the bankers
Pity the investment banker.
He has gone through so much: There was the fall of Lehman Brothers and all those books and HBO movies that put his greed (isn't greed good?) in not so favorable a light; his impetuous behavior has been blamed for the financial crisis; President Obama has said mean things about him, and, worst of all, he has been forced to listen to the drum circles of Occupy Wall Street.
Now an arrogant young man comes pitching his company's initial public offering. Instead of paying homage to the rightly masters of the universe, he shows up in a hoodie, takes private meetings instead of pimping himself on a stage, and does little to conceal the notion that he'd rather be back in his Silicon Valley office working with engineers and doing the things that he's good at.
I say, good for Mark Zuckerberg. He's in a position most of us who have scrambled to find obscure documents in order to get a mortgage dream about: Telling a bunch of bankers to take it or leave it. No, that's not what he's said (far as we know), but his actions have sure implied it. He's reportedly forced the bankers managing Facebook to lower their regular cut of the IPO, from the usual 2 or 3 percent to as little as 1 percent, and now according to an entertaining report on Bloomberg, causing some offense with his trademark hoodie.
"Mark and his signature hoodie: He's actually showing investors he doesn't care that much; he's going to be him. I think that's a mark of immaturity," Wedbush Securities analyst Michael Pachter complained to Bloomberg's Mark Milian. "I think that he has to realize he's bringing investors in as a new constituency right now, and I think he's got to show them the respect that they deserve because he's asking them for their money."
As my colleague Dan Farber asked last night, "What, no bowing to the bankers?" Quelle horreur! It's not often you find yourself cheering for a guy who is going to become a billionaire before his 30th birthday, but let's face it: Zuckerberg is living the American dream; building a company from scratch, creating more than 3,500 good jobs so far, and getting rich because of it. Isn't that what entrepreneurs are supposed to do?
The banking industry, on the other hand, simply wants a piece of the action. Yes, they are serving a purpose and helping Zuckerberg and his employees cash in and potentially allowing other investors to make money on Facebook's offering. That's their job, and they're paid to do it.
But let's not take this whole "Wall Street is the engine of the economy and should be paid its due respect" thing too far. Without getting into the hard-to-pin-blame real estate disaster of the last decade, we can say the financial sector has shed 459,400 jobs over the last four years, according to a recent analysis of Labor Department statistics by The Business Journals (hat tip to The Huffington Post). And they're not done. The Wall Street Journal reported last month that the big Wall Street banks are getting ready to shed more jobs over the next few months.
Mind you, this an industry that had to be saved from itself through a massive infusion of cash from the federal government (ie., you and me, the people who pay taxes). And what was the lesson learned from the brush with disaster? You tell me. JP Morgan Chase CEO Jamie Dimon, the face of oblivious Wall Street wealth, received $23 million in total compensation last year, about the same as the year before, according to Bloomberg. (Yes, I know JP Morgan repaid its $25 billion in taxpayer money.)
So you'll have to pardon me if I get a few chuckles out of the irreverence of a young entrepreneur who, far as I know, hasn't been subsidized by taxpayers and hasn't risked taking the global economy off a cliff.
In the end, what do hoodies and non-worshipful tones mean to Facebook's IPO? Not a dang thing. Even the guy who complained about it set a $44 target price for Facebook shares -- well above the expected $28 to $35 opening price -- and gave the company an "outperform" rating. Complaining about a hoodie and saying it's a sign of immaturity is just another faux offense to an industry that's been smarting since President Obama called them fat cats.
Tomorrow, I'll go back to complaining about Facebook's frictionless sharing and its sneaky assault on user privacy and questions about its long-term revenue potential (and yes, yes, I know Zuckerberg has been less than warm and fuzzy to some people on the way up). But for today, I have to applaud an executive who refuses to bow and scrape before the plutocrats.