Investing

Renren Shares Hit by Facebook IPO

Renren Inc. (NYSE: RENN), the Chinese company usually referred to as China’s Facebook Inc. (NASDAQ: FB), is down sharply this morning on very heavy volume. There’s no news, except the Facebook IPO, and speculation about whether or not that means Facebook will take a run at Renren on its own turf.

One could be forgiven for wondering whether a foray into the Middle Kingdom would be a smart thing for Facebook to undertake any time soon. Our look at Chinese internet stocks yesterday didn’t come up with a lot of positives in the Chinese internet space. The big one — numbers — hasn’t yet driven significant revenues in China, even though revenues have been growing.

One could also be forgiven for thinking that Facebook’s best course would be to get its own advertising model sorted out in the US before it tackles the Chinese market. There is plenty of evidence that advertising that works in the US does not translate well into Chinese. Facebook might want to let some other US firms do the heavy lifting here.

Shares of Renren are down about -12% at $5.49 in a 52-week range of $3.21-$13.88.

Paul Ausick

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