"Chinese Facebook" Down After Solid Earnings

Renren Inc

shares are down sharply this morning, down almost 5% after the company reported quarterly earnings last night. Initially, shares were bid higher this morning, but have since fallen precipitously. The company reported a first quarter loss of 4 cents per American Depository share, versus 14 cents last year. First quarter revenue rose 47%, going to $20.6 million. For the second quarter, the company, which has been called the "Chinese Facebook," said it expects second quarter revenue to come in at $29-$30 million, about in line with Wall Street expectations of $29.6 million. "I am pleased to report a robust first quarter, in particular the doubling of our advertising revenues compared to the same period last year. During the first quarter, our business progress was highlighted by the strong growth in our user base and user engagement level, which has been driven by our relentless focus on providing the best user experience and the ongoing adoption of real-name SNS service in China," said Joseph Chen, Chairman and Chief Executive Officer. "Our brand continues to strengthen. Our recent IPO has helped heighten Renren brand awareness and popularity among our users, business partners, advertisers and future employees," Mr. Chen continued. Social networking IPO's have been hot lately, as LinkedIn

went public to much fanfare. Groupon has already filed its S-1, and Facebook is expected to file its S-1 sometime this year or early next year. At last check, shares of RENN were off 22 cents to $7.38 in early Tuesday trade.