Renren: An Indirect Play In Online Lending
Renren Will Never Be China's Facebook
Pamela de Butler
Pamela de Butler
You Won't Get Renren That Cheap Again
Mon, Jul. 11, 3:00 PM
Tue, May 31, 3:00 PM
Wed, Jan. 20, 1:18 PM
- Like clockwork, high-beta tech stocks continue selling off at a feverish pace as markets nosedive. Today's selloff comes with the Nasdaq down 2.7%, and the S&P 3%. Margin calls are likely a contributing factor.
- Solar stocks, which sold off yesterday even as major indices moved little, are underperforming again as energy stocks get routed once more and oil drops below $27/barrel. Hard-luck SunEdison (SUNE -13.6%) is now close to $2. Also tumbling: Canadian Solar (CSIQ -8.8%), ReneSola (SOL -8.2%), and Yingli (YGE -6.9%).
- Security tech plays FireEye (FEYE -9.3%), Palo Alto Networks (PANW -6.1%), Rapid7 (RPD -11.6%), and Vasco (VDSI -10.5%) aren't faring better - peers Fortinet and Barrcauda were downgraded this morning. Nor are Splunk (SPLK -7.7%) and Tableau (DATA -7.2%), two firms often hyped as big data/analytics plays, or Russian tech firms Yandex (YNDX -6.6%) and Qiwi (QIWI -6.9%), which often sell off when oil prices and the ruble are under pressure.
- Elsewhere in tech, big decliners include Zillow (Z -7.1%), Square (SQ -6.7%), Fitbit (FIT -6.6%), Groupon (GRPN -6.9%), TrueCar (TRUE -7.7%), Pure Storage (PSTG -7.8%), Jive Software (JIVE -7.4%), Shopify (SHOP -7.2%), Ruckus Wireless (RKUS -8%), Renren (RENN -6.8%), Infinera (INFN -6.1%), TripAdvisor (TRIP -6.5%), Ellie Mae (ELLI -6.7%), and Knowles (KN -6.2%).
- Also off sharply: Several large-cap tech stocks, TowerJazz, Synaptics, Adtran
Jul. 9, 2015, 11:25 AM
- With local regulators continuing to scramble to halt plunging equity prices - among other things, investors with 5%+ stakes have been barred from selling shares for 6 months - Chinese markets reversed course last night. Shanghai rose 5.8%, Shenzhen rose 3.8%, and Hong Kong rose 4.5%. The Nasdaq is currently up 1.2%.
- Not surprisingly, U.S.-traded Chinese tech firms are flying higher. Big gainers include Sina (SINA +13.6%), Sohu (SOHU +11.1%), JD.com (JD +8.1%), Vipshop (VIPS +8.3%), Qunar (QUNR +9%), ChinaCache (CCIH +14.1%), Renren (RENN +9.5%), Wowo (WOWO +11.9%), Leju (LEJU +9.1%), China Mobile Games (CMGE +8.3%), Xunlei (XNET +9.7%), Sky-mobi (MOBI +9%), and eLong (LONG +18.1%).
- Also up strongly (previously covered): Qihoo, 21Vianet, E-House, Youku, Baozun, NQ Mobile, Weibo, Cheetah Mobile, Jumei, and Momo. In addition, YY and Dangdang are rallying after becoming the latest Chinese companies to receive going-private offers.
- The Guggenheim China Tech ETF (NYSEARCA:CQQQ) is now up 19% from a Wednesday low of $30.09; it's still down 22% from a May peak of $45.74.
- ETFs: KWEB, QQQC, EMQQ
- Two days ago: Chinese tech stocks crater; many names down over 10%
Jul. 7, 2015, 10:42 AM
- The selloff in Chinese equities refuses to let up: Shanghai fell 1.3% overnight, Shenzhen fell 5.3%, and Hong Kong fell 2.7%. The declines come amid a backdrop of frantic government efforts to halt the plunge, and requests by hundreds of Chinese companies for trading halts.
- The lion's share of U.S.-traded Chinese Web and mobile firms are down at least 5%, and many are down more than twice that. In alphabetical order by ticker, major decliners include Autohome (ATHM -10.6%), Bitauto (BITA -18.7%), Baozun (BZUN -22.7%), ChinaCache (CCIH -14.6%), Cheetah Mobile (CMCM -15.2%), China Mobile Games (CMGE -13.2%), Ctrip (CTRP -10.1%), Changyou (CYOU -12.6%), Dangdang (DANG -13.8%), iDreamSky (DSKY -15.4%), E-House (EJ -15.9%), Jumei (JMEI -20.2%), Leju (LEJU -12.1%), eLong (LONG -12.6%), Momo (MOMO -9.4%), NQ Mobile (NQ -16.7%), NetEase (NTES -12.2%), Qihoo (QIHU -10.3%), Qunar (QUNR -14.2%), Renren (RENN -17.8%), SouFun (SFUN -16.3%), Sohu (SOHU -10.9%), Taomee (TAOM -15.1%), Vipshop (VIPS -9.7%), Weibo (WB -10.9%), 500.com (WBAI -26.2%), Wowo (WOWO -26.7%), 58.com (WUBA -17.3%), Xunlei (XNET -14%), Youku (YOKU -12.2%), and YY (YY -9.4%).
- The plunge seen over the last two months (aided by panic selling and margin calls?) has led multiples for U.S.-traded Chinese tech names to compress dramatically, with forward P/E and P/S ratios often below those of U.S. peers sporting similar growth profiles. The Guggenheim China Tech ETF (CQQQ -9.3%) is down 29% from a May peak of $45.64.
- ETFs: KWEB, QQQC, EMQQ
- Yesterday: Chinese tech stocks tumble again in spite of fresh government support
- Earlier today: Chinese phone firms decline as country's markets sink
- Update: The group pared its losses a bit in afternoon trading. CQQQ closed down 5.8%.
Jun. 10, 2015, 12:48 PM
- Continuing a widespread trend of going-private offers for U.S.-traded Chinese tech firms, Renren (NYSE:RENN) chairman/CEO Joseph Chen and COO James Liu have offered to buy the company for $4.20/share in cash - a modest $0.09/share premium to Tuesday's close.
- Chen and Liu currently own 32% of Renren's shares, and control 49% of its voting power. They intend to finance the purchase with "a combination of debt and equity capital, and rollover equity in the Company." As is the norm, Renren's board plans to form a committee to weigh the proposal.
- The Street isn't impressed with the offer price. Renren, buoyed by a major Chinese Internet stock run-up and enthusiasm about the company's online lending investment portfolio, was up 64% YTD going into today.
May 22, 2015, 12:09 PM
- The Shanghai exchange rose 2.8% overnight to a 7-year high, and has once more taken U.S.-traded Chinese Internet/mobile names higher with it.
- Major gainers include Renren (RENN +10.4%), Youku (YOKU +14.1%), SouFun (SFUN +10.8%), Weibo (WB +4.4%), Dangdang (DANG +7.9%), Momo (MOMO +9.7%), and iDreamSky (DSKY +4.9%). Ctrip and eLong are also up sharply, following news an investor group featuring Ctrip bought a 62.4% stake in eLong from Expedia.
- Renren, whose stable of online P2P lending investments has been drawing attention, is now up 31% since its May 12 Q1 report. Youku is up 33% since providing strong Q2 guidance to go with mixed Q1 results on Wednesday evening. Momo is up 44% since delivering market-pleasing Q1 results on Monday afternoon.
- ETFs: KWEB, CQQQ, QQQC
May 13, 2015, 2:38 PM
- Though down 41.1% Y/Y, Renren's (NYSE:RENN) Q1 revenue of $13.7M was above guidance of $11M-$13M (set on March 18). In addition, the hard-luck Chinese social networking/gaming firm is guiding for revenue to rise to $15M-$17M (still down 25.8%-34.5% Y/Y) in Q2.
- Online ad sales (social networking-related) fell 62.9% Y/Y in Q1 to $2.3M, and gaming revenue fell 56.5% to $5.5M. However, value-added service revenue rose 35% to $5.9M thanks to Renren's Woxiu social video platform. Monthly logged-in users were 46M, flat Q/Q and down 5M Y/Y.
- Operating expenses fell 16.6% Y/Y to $29.7M. Renren ended Q1 with $413M in cash/short-term investments, $579M in long-term investments (inc. Renren's investments in online lending firms), and no debt. The company's market cap is currently just $698M.
- Q1 results, PR
May 11, 2015, 2:37 PM
- The Shanghai exchange rose 3% overnight, continuing a torrid 2015 after the PBOC slashed its benchmark rate by 25 bps in a fresh easing move. A slew of Chinese Internet/mobile names are rallying while the Nasdaq barely budges.
- Gainers include Qihoo (QIHU +3.3%), Weibo (WB +3.4%), SouFun (SFUN +7.2%), Renren (RENN +3.1%), Cheetah Mobile (CMCM +10.6%), ChinaCache (CCIH +7.3%), Autohome (ATHM +4.9%), Xunlei (XNET +7.2%), Jumei (JMEI +7.3%), and Changyou (CYOU +6%).
- The massive rallies occurring in the absence of major company-specific news (particularly for thinly-traded names) have triggered comparisons with the Dot.com bubble. However, many U.S.-traded firms remain well below their 2014 highs, and their forward P/E and P/S multiples (though often not cheap) are generally well below those sported by Dot.com-era darlings.
May 5, 2015, 2:51 PM
- The high-flying Shanghai exchange was down 4.1% overnight amid reports local brokerages are tightening margin requirements. Over in NYC, the Nasdaq is down 1.6%, leading a broader market selloff.
- That's proving a bad combo for Chinese Internet stocks, many of which have shot higher in recent weeks. Major decliners include Qihoo (QIHU -8.9%), Sky-mobi (MOBI -10.6%), Leju (LEJU -6%), E-House (EJ -4.7%), Qunar (QUNR -4%), and Renren (RENN -4.6%).
- Baidu is also off sharply, thanks in part to a JPMorgan downgrade. Alibaba, which reports on Thursday, is seeing more modest losses.
- ETFs: KWEB, CQQQ, QQQC
Apr. 27, 2015, 12:17 PM
- Chinese Internet stocks are adding to their big recent gains following a 2.7% overnight rally in Shanghai, as investor sentiment towards Chinese equities continues improving following a string of stimulus moves. Today's gains come with the Nasdaq (took out its 2000 highs on Friday) down 0.2%.
- Baidu (BIDU +3%) is among the winners. Others include Youku (YOKU +10.7%), Vipshop (VIPS +4.1%), Dangdang (DANG +6.7%), 58.com (WUBA +3%), E-House (EJ +3.7%), 500.com (WBAI +4.3%), Sina (SINA +4.1%), Bitauto (BITA +3.1%), Autohome (ATHM +2.4%), Qunar (QUNR +3.5%), Xunlei (XNET +5.7%), and Renren (RENN +2.3%).
- Baidu's gains come ahead of its Wednesday Q1 report. Vipshop and 58.com have made fresh highs; the latter is up 61% since the first report emerged of a deal (later confirmed) with rival Ganji.com. Youku is up 53% from an April 2 post-earnings low of $12.31, and 500.com is up 47% since the company suspended all online lottery sales in early April, while stating it will work with regulators to restart sales. Renren is up 31% from its March 30 close, possibly aided by enthusiasm for its large and growing portfolio of online lending investments.
- JD.com and Sky-mobi are rallying today with the help of bullish analyst notes. Perfect World has received a lift from an improved buyout offer.
- ETFs: KWEB, CQQQ, QQQC
Apr. 23, 2015, 3:27 PM
- Only a handful of tech companies are seeing major declines amid a 0.6% gain for the Nasdaq. A somewhat larger number are seeing big gains.
- Today's notable tech gainers include wireless IP licensing firm WiLAN (WILN +5.3%), Chinese social networking/gaming services firm Renren (RENN +4.8%), authentication hardware/software vendor Vasco (VDSI +4.1%), mobile banking tech provider Mitek (MITK +5.6%), and e-commerce listing/monetization services firm ChannelAdvisor (ECOM +5.7%).
- Renren is up 10% over the last two days. Beaten-down ChannelAdvisor has rallied ahead of its May 4 Q1 report. WiLAN's gains come ahead of its April 29 Q1 report.
- Previously covered: Chinese online real estate, Nuance, Solar3D, Medidata, F5, Citrix, Logitech, Rocket Fuel
- Notable decliners: Chip stocks, MobileIron, Avnet, Cognex, Ericsson
Apr. 2, 2015, 11:20 AM
- Renren (NYSE:RENN) has offered to buy back up to $50M worth of shares at prices between $2.40-$2.75 (minus a $0.05 cancellation fee), through a Dutch tender offer.
- The offer is good for repurchasing ~1/12 of Renren's outstanding shares. The purchases will count towards Renren's $100M buyback program, of which $48.6M had been used as of March 13.
- Renren had $183M in cash as of the end of 2014. The offer comes with shares close to a 52-week low of $2.35.
- Update: Also of interest: In a Tuesday article (now out of embargo), SA Pro author Michael Fu notes Renren bought a 27.1% stake in major online P2P lending platform SoFi for $49M in 2012. Fu notes that stake would be worth $950M, before factoring dilution, if SoFi does an IPO at the $3.5B valuation it's reportedly seeking.
Mar. 24, 2015, 3:18 PM
- Today's notable tech gainers include chip packaging/testing firm ChipMOS (IMOS +3.7%), and headphone maker Skullcandy (SKUL +3.9%), mobile banking tech provider Mitek (MITK +6.5%), search toolbar/mobile ad platform provider Perion (PERI +8.8%), Chinese social network/game provider Renren (RENN +4.8%), peripherals giant Logitech (LOGI +4%), security IP licensing firm Finjan (FNJN +13.7%).
- Notable decliners include e-commerce services firm ChannelAdvisor (ECOM -5.6%), program guide/content protection IP firm Rovi (ROVI -4.3%), telecom equipment vendor Calix (CALX -3.5%), and Fibre Channel/Ehternet switch vendor Brocade (BRCD -3.4%).
- Likely helping Finjan: An H.C. Wainwright note stating the company has committed $5M to a Jerusalem Venture Partners (JVP) cybersecurity fund; Alibaba announced yesterday it's investing in JVP. Logitech announced a $100 wireless mouse today. Skullcandy is once more within striking distance of a 52-week high of $11.83.
- Previously covered: Twitter, solar stocks, Sonus/AudioCodes/BroadSoft, Neonode, Arista, Taser, Ciena, Zagg, Gogo, Digital Ally
Jan. 2, 2015, 12:32 PM
- After falling 18% in 2014 amid ongoing revenue and traffic losses, Renren (NYSE:RENN) is starting 2015 off on a strong note. 392K shares have been traded vs. a 3-month average of 762K.
- The Chinese social network owner/game developer is two days removed from announcing CFO Hui Huang and director Stephen Murphy are resigning. Huang is being replaced by finance VP Ashlew Law Kwok Wai.
Dec. 1, 2014, 10:38 AM
- Chinese Internet and telecom names are among the biggest tech decliners as the Nasdaq registers a 0.9% drop. A soft November PMI print isn't helping.
- Giants Alibaba (BABA -4.3%) and Baidu (BIDU -2.8%) are among the casualties. As is Qunar (QUNR -5.8%), which reports after the bell.
- Other Internet decliners: BITA -12%. QIHU -4.4%. CTRP -4.3%. SFUN -7.2%. LEJU -7.5%. RENN -6.3%. SINA -3.8%. WB -3%. YY -3.9%. VIPS -3.8%. SOHU -3.5%. MOBI -4.3%. CMGE -8.6%.
- Telecom decliners: CHL -3.6%. CHU -3.9%. CHA -4%.
- ETFs: KWEB, CQQQ, QQQC
Renren Inc. engages in the operation of Internet portal sites and social networking sites, online advertising services, online gaming operations, and the provision of Internet value-added services. Its platforms includes Renren.com, Game.renren.com, Nuomi.com, and 56.com. The company was founded... More
Industry: Internet Information Providers
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