(Reuters) - Shares of social networking site Renren Inc (RENN.N), dubbed China’s Facebook, have lost nearly all the gains made since debut, and were trading down 8 percent.
The stock, which gained 24 percent on May 4 when it listed on the New York Stock Exchange at $14, lost 6.33 percent on May 5, 0.41 percent on May 6 and 4.58 percent on Monday.
“The issue is two-fold: first you have these lingering accounting concerns that are increasingly troubling as more and more investors peel back the layers on Renren and do some additional due diligence,” Morningstar IPO strategist Bill Buhr told Reuters.
In a regulatory filing with the SEC before its public offering, Renren said it had found a “material weakness” and a “significant deficiency” in its internal financial controls, but added that it has not conducted a comprehensive review.
“Secondly, this is a business — Internet and content — that the Chinese government could at some point either attempt to regulate, or flat-out censor, which would diminish the value of Renren’s product and content offering almost immediately,” Buhr said.
Renren’s operations, which include social networking, gaming and online commerce, walk a thin line of compliance with strict Chinese regulations around freedom of information.
The stock fell as much as 9 percent to $14.52 on Tuesday and were trading at $14.75. More than 1.7 million shares changed hands.
Reporting by Himank Sharma in Bangalore; Editing by Joyjeet Das