** weekly **
Showing posts with label RENN. Show all posts
Showing posts with label RENN. Show all posts
Friday, December 30, 2011
Thursday, December 8, 2011
Tuesday, August 30, 2011
Saturday, August 6, 2011
RenRen (RENN) - 3 months after the IPO
First day of trading : May 4, 11
Offer price: $??
First day open: $19.50
First day close: $18.01
------- 3 months later -------
Aug 5, 11: close $7.62; 3-month performance (since first day's close): -58%
Friday, July 1, 2011
SEC on lookout for bubble-era IPO practices
"You can't help but be concerned by IPO valuations," Robert Khuzami, the SEC's enforcement chief, told an audience of Wall Street lawyers and compliance officers in New York on Tuesday.
A combination of first-day trading spikes -- such as a 109 percent advance by social networking company LinkedIn Corp (LNKD) last month -- and razor-thin yields on bonds and other securities, may create an environment where Wall Street investment banks can take advantage of investor demand.
"It hasn't been that long ago that allocation practices were at the forefront of everyone's mind, and charges were brought against firms for Reg M and aftermarket violations for using their allocation process for creating demand in the aftermarket," Khuzami said at a luncheon hosted by the Securities Industry and Financial Markets Association.
Khuzami said the SEC will look to see "whether or not" these issues "give rise to practices that we saw historically and that troubled us."
LinkedIn's shares on May 19 more than doubled in price on their first day of trade on the New York Stock Exchange, evoking memories of the frenzied dot-com bubble years. The advent of online brokerage accounts and a nation of day traders helped then start-ups like theglobe.com, VA Linux and MarketWatch.com rise by six- and seven-fold.
Many of these bubble babies burned through their proceeds and then disappeared, leaving millions of small investors stuck with losses.
The SEC and other regulators later brought cases against Wall Street's biggest banks for a number of practices designed to generate those eye-popping returns.
Regulation M is a set of SEC rules intended to preclude manipulative conduct by individuals with an interest in the outcome of a securities offering.
Investment bankers, serving as the bridge between investors and companies, typically try to price an IPO so that the stock rises about 15 percent on the first day of trading: enough to reward investors who made a bet but not so much that issuers feel short-changed.
NEW BUBBLE?
Recently, several hot-button technology companies and Chinese firms have generated big first-day gains.
Renren Inc (RENN), one of the biggest social networking companies in China, last month surged 296 percent in its debut. Strong demand for the unprofitable company was viewed as a sign investors were eager to snap up social media companies.
There was also a 134 percent jump by Qihoo 360 Technology (QIHU) in March. Yandex NV (YNDX), known as "Russia's Google," rose 55 percent in its trading debut.
Khuzami before his luncheon remarks told Reuters that the recent news of accounting scandals involving a number of Chinese companies has the agency's full attention.
"We're looking at that issue from a variety of fronts, from listing standards of the exchanges, to the (Public Company Accounting Oversight Board) and enforcement," he said on the sidelines of the SIFMA event. "We're obviously focused on the auditing firms. It's a problem and we're devoting some energy to it."
The recent collapse of Sino-Forest, a Canada-listed Chinese company, raised pressure on regulators to stem a tide of accounting scandals that snagged investors who had been eager to tap into China's growth.
Last week SEC Chairman Mary Schapiro said the agency would address concern about shoddy accounting that has caused numerous Chinese companies to restate earnings and send their share prices plummeting.
Some market watchers, though, say there are signs that investors are more skeptical this time around.
Internet radio provider Pandora Media Inc (P) rose by half on its first day, but the money-losing company saw its shares fell hard in subsequent days and remain below their offering price.
Saturday, June 25, 2011
Chinese stocks lose their luster in US markets
High-flying shares in Chinese companies have come crashing to the ground recently, amid a flurry of accounting scandals and a crackdown by US regulators.
Less than two months ago, US investors were eagerly buying shares in Renren (RENN), a social-networking company dubbed the "Facebook of China," and other firms that seemed poised to benefit from China's rapid economic growth.
Renren's shares jumped 29 percent on the day of its initial public offering (IPO) on the New York Stock Exchange in May. Then they sank, closing at just $7.03 on Friday, down to about half of their IPO price of $14.
Of the 12 Chinese companies that have debuted on US exchanges this year, only two are trading above their IPO prices, according to data from Morningstar, an investment research company.
"The drumbeat out of China right now is that certainly there's an air of fraud and of different sets of numbers for Chinese reporting versus US reporting," said Bill Buhr, an analyst with Morningstar.
"It basically is spooking investors. I think they assume that where there's smoke, there's fire," he added.
The fallout threatens even firms which have not been tainted by accusations of wrongdoing, such as search engine Baidu, which closed at $117.68 on Friday, a drop of nearly 25 percent from its intraday high of $156 in April.
"Is This the China Bubble Bursting?" asked a recent headline in The Wall Street Journal.
The most recent Chinese company to fall under a cloud is Harbin Electric, whose stock has plunged more than 40 percent since Thursday, when a research firm accused it of falsifying documents.
Harbin Electric, a machinery maker listed on the NASDAQ, has denied the accusations.
The Securities and Exchange Commission has halted trading of several Chinese firms this year, accusing them of violations like keeping two sets of books or failing to disclose that their auditors had quit.
Last week, the SEC said it was probing two more firms -- China Intelligent Lighting and Electronics and China Century Dragon Media -- for submitting "materially misleading and deficient offering documents."
"It will be difficult for Chinese IPOs to go forward in the US until the managements of companies decide to improve their operational and financial disclosure," said Linda Killian, a principal at Renaissance Capital, which researches the IPO market.
Many of the Chinese companies being probed by the SEC listed on US exchanges through "reverse mergers," a controversial technique in which a firm seeking to go public acquires a publicly traded shell company.
Financial reporting requirements are not as stringent for reverse mergers as they are for traditional IPOs, and the SEC issued a warning about the practice earlier this month, which singled out several Chinese firms.
"Given the potential risks, investors should be especially careful when considering investing in the stock of reverse merger companies," Lori Schock, an SEC official, said in a statement.
Other factors have also harmed Chinese IPOs, such as rising inflation in China, tighter capital requirements for Chinese banks and civil unrest in smaller Chinese cities, said Killian of Renaissance Capital.
As the craze for Chinese IPOs has waned, commentators such as stock-market guru Jim Cramer have turned their attention away from China's strong growth prospects and towards its weak record on corporate governance.
"There's very little corporate governance, informal auditing, and of course, the prospect of government intervention since, remember, it's still officially a communist country," Cramer said on CNBC television.
Wednesday, May 4, 2011
‘Facebook of China’ Renren’s IPO prices after delay
Renren’s IPO was expected to price Tuesday night and begin trading on the New York Stock Exchange Wednesday, but that has been pushed back one day, according to Reuters, which cited anonymous sources.
The highly-anticipated RenRen (NYSE: RENN), which has been dubbed the “Facebook of China,” planned to offer 53.1 million shares priced between $12 and $14.
It’s unclear what caused the delay. The company had two untimely news events hit right before the IPO. The company’s head of its audit committee, who is also a board member, quit after allegations of fraud against Longtop Finanicial Technologies, where Derek Palaschuk is CFO, WSJ reported. That came a week after the company revised down its unique user numbers to a rise of 19% compared to what it originally said was 29%.
Renren’s net revenues were $76.5 million in 2010, up 64% from $46.7 million in 2009 and up from $13.8 million in 2008. Renren had a net loss in 2010 of $64.1 million, down from $70.1 million in 2009.
So underwriters are expecting a valuation of more than $4 billion for a company with $76.5 in revenue. That’s 67 times sales, compared to 25 times for Facebook’s last funding from Goldman Sachs. That’s not cheap, as Kenneth Rapoza points out. Most of China’s Internet stocks like Baidu and Sina trade at 50 times forward earnings, Rapoza notes.
Reflecting strong investor demand, Renren raised the range of the offering last Friday from a range of $9 to $11 to a range of $12 to $14.
Even with 117 million users, Renren still has room to grow in China’s massive Internet market. Investors will be looking for strong growth from the company. In December China Internet stocks Dangdang and Youku were hot IPOs.
“Seeing that Facebook is not allowed in China, it’s the closest facsimile to Facebook that the Chinese government will allow,” said Scott Sweet, senior managing director at IPOBoutique.com. “Renren has a tremendous user base that use it on a daily basis.”
Still Renren is not the only social network in China–see Sina Corp.’s Sina Weibao–the “Twitter of China” with more than 100 million users. One major difference of Renren from Facebook is that Renren does not make most of its revenue from advertising the way Facebook does. Only 42% of Renren’s 2010 revenue came from ads, while 45% came from online games.
Major investors in Renren include Softbank Corp’s SB Pan Pacific Corporation, with 39.6%, venture firm DCM, with 8.6%; and growth equity firm General Atlantic LLC with 5.3%. Renren founder and Chief Executive Joseph Chen, is selling 13 million shares to take his ownership from 28% to 23%.
Morgan Stanley, Deutsche Bank and Credit Suisse are lead underwriters on the offering.
RenRen (RENN) - starts trading on the NYSE
China's Renren Inc. Chairman and Chief Executive Officer, Joseph Chen (C) is joined by executives and guests as he rings the opening bell at the New York Stock Exchange, May 4, 2011.
Renren Inc. (Renren), formerly Oak Pacific Interative, is a social networking Internet platform in China. Renren generates revenues from online advertising and Internet value-added services (IVAS). The Company’s platform enables its users to connect and communicate with each other, share information and user-generated content, play online games, listen to music, shop for deals and a range of other services. Its platform includes: Renren.com, Game.renren.com, Nuomi.com and Jingwei.com.
The Company is also a developer and operator of Web-based games and offers the games through game.renren.com. Renren.com is the Company’s primary social networking Website in China. Game.renren.com is its online games center. Nuomi.com is Renren’s social commerce sites in China. Nuomi.com is a independent new business of Oak Pacific Interactive Co. (OPI) that offers a daily deal on the local services and cultural events.
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