Renren revised IPO filing shows slower user growth
NEW YORK (Reuters) - In the run-up to one of the hottest social media IPOs of the year, China's Renren Inc lowered the number of users it said it gained in the first quarter of 2011, raising questions about the rest of the information it provided to investors in official filings.
According to the revised filing on April 27, the Chinese Facebook clone's monthly unique log-in user base grew by only 5 million, or 19 percent, in the first quarter of 2011 -- not the 7 million, or 29 percent, it reported in its first filing.
The difference came as the company, in its revision, said it had 26 million monthly unique log-in users in December 2010 -- the month before the quarter began -- after having originally put the number at 24 million.
Although bankers brush off concerns about the data and statistics provided by the frothy Chinese technology sector, Renren's revision highlights a broader trend of opaque reports Chinese companies provide to potential investors who are clamoring to profit from the booming pace of Internet expansion in China.
China's Internet sector -- the world's largest by users -- is red hot because it is difficult for outside competitors to overcome the political and cultural barriers to operate there, and some analysts warn of a bubble.
Renren, whose investors include private equity firm General Atlantic, hopes to tap the strong appetite for Chinese tech stocks and raise up to $584.1 million in an IPO next week. It is one of the first of a handful of Chinese "Facebooks," including Kaixin001, that are looking to boost their profile with U.S. listings.
Renren was not immediately available for comment.
Morgan Stanley, Deutsche Bank Securities and Credit Suisse are leading the underwriters on the Renren IPO.