Renren shines on US debut; analysts wary

16:51, May 06, 2011      

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A Renren Inc banner hangs outside the New York Stock Exchange on Wednesday. Renren, thought of as a Chinese version of Facebook, rose as high as $24 from its issue price of $14 a share.(Source: China Daily)


While foreign investors hailed the 28.6 percent surge of Renren Inc at its trading debut on the New York Stock Exchange Wednesday, analysts and industry experts in China raised concerns of a possible risk to China's largest social networking site.

They are worried that as initial euphoria fades, investor expectations could be hit by a slowdown in the company's growth rate, fierce competition and uncertainty in the regulatory environment.

"The growth of Renren in recent quarters has been slow, or flat actually," said Duncan Clark, chairman of the consultancy, BDA China Ltd.

He added that investors simplify things by relating the US websites to the Chinese versions, "but sometimes they are wrong".

Dubbed the Chinese version of Facebook, the world's biggest social networking site, Renren rose as high as $24 from its issue price of $14 a share on Wednesday. The shares closed at $18.0.

Investor confidence was based on the prospects for China's booming Internet market and Renren's similarity to Facebook, which was valued at $65 billion by institutional investors at the end of March, according to figures from Nyppex, a private share-trading market.


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(Editor:张茜)

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