Renren Inc.'s (RENN) first-quarter loss narrowed on a leap in revenue and relief
from warrant write-downs in the year-earlier period, as the Chinese
social-networking company reported its first results as a U.S.-listed company.
Renren American depositary shares were down 1.2% at $7.52 in after-hours trading.
The stock has dropped steeply in the weeks since its initial public offering last
month. The ADSs priced at the top end of the IPO's estimated range, but they have
fallen by 46% from that pricing level.
Chairman and Chief Executive Joseph Chen called it a robust quarter, especially
for advertising revenue, which doubled from a year earlier. He also said the
company saw strong growth in its user base and user-engagement level.
However, the top line had a sequential decline.
Renren has one of the largest social-networking websites in China based on unique
visitors, and it also operates sites where visitors can play games online and
find group-based coupons.
It has a history of operating losses.
Many newly public Chinese companies, like Renren, have seen their ADSs sink in
recent weeks. Investors have grown more wary of Chinese companies as several are
marred by questions over accounting and disclosure investigations. Investors have
also begun to realize some Chinese companies, especially Internet-focused
companies like Renren, face more competition and have less revenue-generation
vigor than originally thought.
Just before listing in the U.S. in May, Renren reduced the user-base growth rate
it gave in its IPO prospectus after observers questioned the figures, and the
head of its audit committee resigned to spare Renren association with fraud
allegations at another company of his.
Monday, the company reported a loss of $2.6 million, or 4 cents per ADS, compared
with a year-earlier loss of $12.1 million, or 14 cents per ADS. Excluding
share-based compensation and impairments in both periods, and a large negative
adjustment on warrants' fair value in the year-earlier period, Renren swung to a
$1.1 million loss from a $645,000 profit.
Revenue jumped 47% to $20.6 million; sequentially, revenue fell 1.7%. Gross
margin rose to 80.2% from 74.6%.
For the current quarter, Renren predicted it would post a revenue of $29 million
to $30 million, which at the top end represents a 51% jump. |
