Chinese social-networking site Renren files for IPO in the US
03 May 2011
Renren Inc, one of the largest social networking websites in China, filed for an initial public offering (IPO) in the US on Friday hoping to raise as much as $743.4 million and become the world's first social network to list on a stock exchange.
According to a filing with the US Securities and Exchange Commission (SEC), the Beijing-based company is offering 53.1 million American depositary receipts for $12 to $14 each, up from the previously set price range of $9 to $11 - an indication that the company expects strong investor demand.
Renren, which in Chinese means "everyone," had reported sales of $76.5 million in 2010, up from $46.7 million the previous year, and a net loss of $61.2 million last year.
Founded in 2005 by Stanford-educated and US citizen Joseph Chen, Renren is a cash-rich company free of debt. It reported net cash of $334.8 million and has short-term investments of $44.5 million. This cash pile has attracted underwriters like Morgan Stanley, which has valued the company at $4.3 billion.
Post IPO, Renren may have a market value of $5.1 billion, based on the midpoint $13 of the offering range, according to Bloomberg.
Apart from Morgan Stanley, other underwriters on the IPO are Deutsche Bank Securities and Credit Suisse.
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