Social Network Renren IPO Soars on NYSE Debut

It was raining outside but inside 11 Wall Street China’s Renren became the first social networking firm to list on The New York Stock Exchange. Its $14 IPO price was at the top of an upgraded price range, and the opening price on NYSE soared almost 40% to $19.50.  Renren’s IPO raised $743 million and its market capitalization at the IPO price was $5.5 billion. Lead underwriters were Morgan Stanley, Deutsche Bank, and Credit Suisse.  Renren operates the leading real name social networking internet platform in China.

Speaking to the listing, Renren Chairman and CEO, Joseph Chen said: “I believe this will enhance our brand and further validate our position as the leading real name social networking internet platform in China. This listing brings us an important step closer to realizing our vision to define social networking experience and to revolutionize the way that people in China connect, communicate, entertain and shop."

Renren had international financial backing, including the billionaire entrepreneur Masayoshi Son’s SOFTBANK, with a 39.6% stake pre-offering.  Other major pre-IPO investors included DCM (8.6% stake) and General Atlantic (5.3% stake), as well as Legend Capital and Accel Partners.

During the listing breakfast celebration, held in the NYSE board room, I met one of Renren’s earliest backers, Mr. Shoa-Kai Liu, Advisory Partner, Rustic Canyon Partners.  Chairman Chen told a story that he and Mr. Liu would meet and eat at McDonalds, and after each meal Mr. Liu would invest $10,000 – one guest aptly described them as “Happy Meals”! 

The most popular man in the building was Chairman Chen, as English and Chinese language media cued up for interviews on the Trading Floor:  Bob Pisani of CNBC, Betty Liu of Bloomberg TV, Rhonda Schaffler of Reuters TV, Michelle Fleury of BBC,  Xinhua News Agency, China Business Network, Wall Street Multimedia, France 24, WSJ Asia, Finet.hkk, and CNN.  In addition, a Chinese media roundtable with 21 Century Business Herald, Shanghai Oriental Morning Post,  The China Press, and Sing Tao Daily, was held on our Executive Floor.  Last but not least was an interview with Caixin Magazine.        

Last year, NYSE listed 22 of 34 Chinese IPOs that raised over $25 million in the U.S., including internet companies Youku (China’s Youtube) and e-Commerce China Dangdang (China’s Amazon). See China Goes Public.

In Chinese culture rain is a positive sign and I see why. Also on Wedneday: Linkedin announced its decision to list its IPO on the NYSE – but I digress. (see our post by Doug Chu)