To get rich from the internet is glorious: China’s biggest social network Renren Inc., is aiming towards a valuation of $743.4 million U.S. dollars for their American initial public offering. According to Bloomberg, at nearly three quarters of a billion, the amount is twice as much as Facebook’s future IPO, as valued by Goldman Sachs:
The Beijing-based company is offering 53.1 million American depositary receipts for $12 to $14 each, according to a filing with the U.S. Securities and Exchange Commission. At the midpoint, Renren would trade at 67 times last year’s sales, compared with 25 times for Facebook as valued by Goldman Sachs Group Inc.’s investment in the U.S. company.
Renren, it would seem, is becoming the social-media horse to bet on. Especially since, according to the Financial Times, Facebook’s IPO is still“at least a year off” from happening – Renren might merely be betting on investors just itching to spend their disposable venture capital.
Like the earlier competition between Google and Baidu, Facebook is now trying to officially enter the Chinese market when a popular site is already well-established. As we’ve all learned recently, Facebook is rumored to be working with Baidu on a modified site for Chinese shores. But much like Facebook’s none too auspicious Chinese name, and the New Yorker’s suggestion that the Facebook brand has possibly become associated with regime change in the Middle East, Mark Zuckerberg’s quest for a Chinese internet concession still looks doubtful.
Poetic justice, you say? Facebook may now worth less than a company who can cite Facebook as a major influence, if you catch our drift. Is Renren founder Joseph Chen going to give Mark Zuckerberg the ‘If you were the inventor of Renren, you’d have invented Renren’ treatment?
Somewhere, the Winklevii are high-fiving and figuring out how to sue Renren for stealing their idea.
By Fan Huang