Chinese social media Renren to list on May 4

20 April 2011 19 h 29 min 21 comments

According to the Chinese online economic publication “Business China”, China’s largest social network service platform operator Renren Inc. will go public on the New York Stock Exchange on May 4. On April 15, Renren officially filed for an initial public offering of American depositary shares that could raise up to $582.7 million, according to its prospectus and could value the company at more than $4 billion. The company applied to list on NYSE under the symbol ‘RENN’ and expects to price shares at between $9 and $10 per ADS. Morgan Stanley, Deutsche Bank Securities and Credit Suisse have been appointed as the underwriters to the deal, according to Renren’s prospectus.

The proceeds from the offering will be used for technology and research and development activities, business expansion and marketing activities, and other general corporate purposes, including potential strategic acquisition and investments, according to the prospectus.

Renren Inc. operates several Chinese websites: Renren.com, China’s largest SNS platform also known as China’s FaceBook with almost 120 million members; SNS game developer and operator game.renren.com; Nuomi.com, a group purchase website and Jingwei.com, an SNS website for professionals.

Renren also said in its prospectus that it may be subject to intellectual property infringement claims or other  allegations by third parties for services they provide or for information or content displayed on, retrieved from or linked to their websites, or distrusted to their users, which may materially and adversely affect the company’s business, financial condition and prospects.

The company’s current revenue streams are online advertising and internet value-added services, such as online games and other internet value-added revenues. Its revenues for 2010 have been estimated to $76.5 million for an operating profit of $7.7 million.

The company also plans to sell $110 million of Class A shares in a private placement to Alibaba Group , China Media Capital and CITIC Securities.

Renren will have two classes of stock. Founder Joseph Chen will retain a 22.8 percent economic stake and, thanks to supervoting Class B shares, a 55.9 percent voting stake following both the IPO and private placement, in which he will sell. The owners of publicly traded shares would hold a 13.4 percent economic stake and a 3.3 percent voting stake.

For some observers, this IPO could have been accelerated by Beijing to position Renren has THE Chinese social network before a potential arrival of facebook to mainland China, maybe in cooperation with Baidu.

SOURCE: Xinhua, Business China (20/04/2011)

Financial slideshow about Renren by iChina Stock

IN THE PRESS:

. How RenRen’s IPO is setting the table for Facebook (CNN, 20/04/2011)

. China’s hot Facebook clone will cool down (IndiaTimes, 19/04/2011)

. Baidu taking social strides, with or without Facebook’s help (Digital Trends, 14/04/2011)

. Facebook Signs Deal with Local Partner to Enter China – Rumors (China Business, 11/04/2011)

. The Winner Of Social Media IPOs Is… China? (Forbes, 22/02/2011)

. Renren’s IPO: friend requests pending (Financial Times, 21/02/2011)

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