Renren (RENN) has had a checkered past. The company had its debut with a splashy $740 Million IPO in 2011 and was heralded as "the Facebook (FB) of China". Over the past seven years, their social network plans have not panned out as expected, with the company losing significant market share to Weibo (WB) and Wechat, and thus gaining the dubious moniker of "The MySpace of China".
Sometime during that dismal fall from grace, the company has pivoted and used a significant amount of its cash resources to invest in various technology startups. It's this technology portfolio that currently has me excited, as I believe that the company will unlock significant value from these holdings in the next 18 months. I believe this technology portfolio sets a floor on the stock worth at least $12 per share.
In addition to that, the company has recently joined the trendy blockchain race. It recently announced an ICO, believing it could skirt China's ban on ICOs by claiming it was a US-based company due to its NYSE listing. That did not fly with Chinese regulators and the company was forced to cancel and refund the fully subscribed and paid 90k Eth ($100M USD) that they raised within 3 days. Despite this setback, I believe Renren will continue to pursue the blockchain space, potentially turning it into a "blockchain momentum play". At the current price of $12.20 per share, I see this as a free option.
The common theme I look for when I'm evaluating a potential mispricing is understanding why that mispricing exists. In this situation, Renren has a small float (just 13M shares), low institutional ownership, poor research coverage, is an international based company (ADR), and has a very public history of being a failing company. The story of Renren isn't about the failing Chinese social network, it's about the multi-billion dollar
