Renren Drops 10%

Billed as the Facebook of China, Renren RENN is seeing significant selling just days after its IPO. The stock is down over 10% on the day and has fallen through its offering price of $14. Investors have pointed to potential accounting issues and fears of strict regulation in China that may have led to a lower valuation. The company started out as Xiaonei (which means “on campus”) and later changed its name to Renren (which means “everyone”), closely following in the footsteps of Facebook. Unlike its American counterpart, Renren is seeing less than a 10% penetration of available users. The company has about 20M-30M active monthly users out of a total population of 400M Chinese internet users. Stiff competition from other Chinese internet companies are also weighing on investors as the broader Chinese market is in the midst of a sell-off today. Shares of Sina Corporation SINA are off approximately 3.5% today and shares of Youko.com YOKU, the YouTube of China, are down by 6.9%.