Gasparino reports the meeting was an attempt to improve Facebook’s dealings with Wall Street which 'have been frosty in the months leading up to the IPO', and was seen as 'an olive branch by the company looking for friends on Wall Street'.
'The meeting between Facebook’s chief operating officer Sheryl Sandberg and Larry Fink, the chief executive of money-management powerhouse Blackrock occurred in recent weeks, as large investors have increasingly lost confidence in the firm’s business model, and shares have hit new lows, according to people with direct knowledge of the matter. Shares of Facebook have lost more than 60 percent of their value from the highs achieved during its may IPO'.
On the pricing of the Facebook IPO set to deter 'flippers' from the stock
'People with direct knowledge of the meeting say Fink agreed to talk to Sandberg at the behest of a mutual friend…These people say Fink and Sandberg discussed both the IPO, and why it was priced at such a lofty level at $38 a share, and how the social media giant might improve its stature with Wall Street. One person with knowledge of the meeting said Sandberg told Fink that the pricing was based in part on the desire of Facebook to make it difficult for Wall Street traders, known as 'flippers' from immediately selling shares at a profit after they were freed to trade'.
On why Facebook has a 'frosty' relationship with Wall Street
'Facebook’s dealings with Wall Street have been frosty in the months leading up to the IPO. Chief executive Mark Zuckerberg initially balked at meeting with investors during the IPO 'road show' where investors meet with top executives of a company as it prepares to go public. Many investors took it as a snub from a company that has shown little if any regard for Wall Street as it prepared to go public and underwriters were told Zuckerberg might attend other venues but would likely skip the all-important New York road-show date. Zuckerberg ultimately relented and made a brief appearance in New York where the top institutional investors had gathered. Still many large investors weren’t appeased, nor were they appeased by Facebook’s business prospects, which show slowing growth in users, revenues and ultimately profits. As a result, large investors didn’t bid up shares significantly during the IPO'.
On Fink’s advice to Sandberg
'The meeting with Fink, one of Wall Street most prominent officials is seen as an olive branch by the company looking for friends on Wall Street, though it’s unclear if Sandberg made the sale. According to one person with direct knowledge of the meeting, Fink asked Sandberg why she was more concerned with flippers and not company insiders who are now selling shares, like venture capitalist Peter Thiel. ‘From what I understand she didn’t have a great answer,’ this person said'.
On Larry Fink’s political support
'Larry Fink is one of the few Wall Street supporters of President Obama… He is favoring the president’s re-election. I don’t know how much money he gave this time he has always been a supporter of the President. We should point out that he is a guy that a lot of people talk about being potentially Treasurer of Secretory. Geithner as you know says he is going to step down'.
Source: FOX Business