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Risky bet on Ren Ren right after IPO. The Chinese Facebook is already on a rollercoster. May 6, 2011

Posted by deminvest in China stock, RENN, Renren.
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This is how I just gambled $ 972 on a crazy IPO on Ren Ren, a young company which supposedly should be the Chinese Facebook:

Symbol RENN Quantity 50 Shares
Date of Order0 5/04/2011 Time of Order 12:54 PM
Executed Price $19.33 Commission $4.95
Total for this Execution $-971.45

I did it this crazy bet for several reasons:

  1. Creative Maths… If  Baidu : Google = RenRen : Facebook , then $51B : $173B = x : $50B and x = $14.7B. If Renren reaches a Market Cap of $ 14 B, it means the stock has gone 10 times up
  2.  Facebook will never be able to operate in China. If they try, then China will want details about Facebook connections of dissidents. Such information could yield death sentences.
  3. I’ve heard form Chinese teachers that Renren is very well known by Chinese students… very much Facebooklike
  4.  Baidu went up 1000% in three years. I can take risks hoping Renren may do the same

Comments»

1. bubba louie - April 18, 2012

Good pick. But I think you got on too early. I picked some up earlier this year at around 5. Renren is not as popular as QQ and other social networks. Have you considered doubling down with the IPO of facebook?

2. deminvest - April 20, 2012

Good timing Loui!

Yes, I jumped in too early.

Later I bought more. Here are all my trades :

05/04/2011 RENN Buy 50 RENREN $19.33 ($971.45)
11/08/2011 Buy 100 RENREN $5.43 ($547.95)
12/13/2011 Buy 75 RENREN $3.58 $4.95 ($273.45)

Now I have 225 shares, average buy price is 7.95. About one dollar higher than current price.

Regarding Facebook, I don’t want to time it wrongly again.

This time I’ll wait for Facebook earnings statements to come out. Facebook earning are likely to disappoint for a while.

I’ll try to pick them up on a lower price.


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