Renren Soars as Facebook Prepares IPO

Shares of Chinese social networking site Renren

are soaring on Monday as rumors circulate that Facebook will file documents for its initial public offering this week. RENN shares have surged nearly 26% on extremely heavy volume in afternoon trading on Friday. At last check, the stock was trading at $6.62, giving the company a valuation of $2.59 billion. RENN shares also surged late last Friday as the initial reports about Facebook's IPO came out. The company is expected to raise as much as $10 billion in its IPO at a valuation of as high as $100 billion. The lofty numbers for Facebook are giving investors reason to reevaluate RENN's valuation. The activity in the stock is also being driven by short covering, as a whopping 55% of RENN's float has been sold short. For this reason alone, the rally in RENN shares could last awhile longer.