Renren shares soar above initial listing price on NYSE after $743m IPO
Renren (NYSE:RENN), a Facebook-like social networking platform in China, made its initial debut on the New York Stock Exchange today in a US$743.4 million IPO, and has since seen its shares rocket as high as 50% above its original listing price.
The Beijing-based company, trading under the symbol "RENN", sold 53.1 million American Depositary Shares (ADS) at US$14.00 per ADS - the high end of the proposed range, it said.
At the $14 initial price, Renren would already be valued at 72 times last year's sales, but as of near 1:00pm EST on Wednesday, the company was still trading at $19.31, at an over 37% premium.
This is because China is the ideal market for internet growth. According to goverment data, the country had 457 million internet users at the end of 2010, of which roughly half used social-networking websites; Facebook is illegal in the country.
Renren, which offers online games, social commerce websites and more, had 117 million users at first quarter-end, less than 25% of the number of Facebook users globally.
China's economy is projected to grow at a rate that is three times faster than the US though, with a large portion of its population not yet online.
Of the 53.1 million shares offered in Renren's IPO, 42.9 million were sold by Renren, and 10.2 million were offered by selling shareholders.
The offering size of US$743.3 million does not include the 30-day over-allotment option given to the underwriters to purchase up to an additional 8.0m ADS, the company said.
Morgan Stanley, Deutsche Bank and Credit Suisse acted as global coordinators of the IPO, while BofA Merrill Lynch and Jefferies & Company acted as joint bookrunners.
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