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Renren Inc. (RENN)

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  • N
    NDBakkenOil
    $SPY conversation
    congrats to all that have been buying ACRX, ACRX going straight up pre market on NEWS!
    ACRX yesterday 2nd highest Volume Day in ACRX's history... ACRX up 100% in 8 days...

    top holdings include $sol $ctra $vvpr $renn $next $ino $gme $peix
  • J
    Jiangzhe
    $RENN conversation
    RenRen Investors Condemn Joe Chen's Deliberate Spinoff
    of the Most Valuable Assets for His Own Gain-- An
    Open Letter
    Renren Board of Directors and Special Committee Members:
    We, a group of retail investors of Renren Inc., are appalled by company’s proposal to spin off
    core non-listed investments using US$500 million (net of debt), led by company CEO Joseph
    Chen and COO James Jian Liu. The price offered by company, significantly underestimates the
    intrinsic value of these assets and the valuation was done by the company itself without any
    transparency. Moreover, company basically excludes all the individual investors from the subscription
    of SpinCo shares and deprives us from sharing the upside of these investments. We
    are very indignant at the way management is trying to benefit from exploitation of minority
    shareholders.
    We Just Don’t See Any Reasons For Spin-off
    According to company, the spin-off is being undertaken to minimize the risk that the Company
    could be deemed to be an "investment company" under the Investment Company Act of 1940
    by reducing the aggregate amount of investments in unconsolidated subsidiaries on the Company's
    balance sheet. However, under Rule 3a-8 of the 1940 Act, Renren is exempt from the risk:
    (1) Net income from investments in securities may not exceed twice the amount of
    its research and development expenses;
    (2) Public statements are such that it does not hold itself out as being engaged in the
    business of investing, reinvesting or trading in securities;
    Regarding the first clause, Renren’s private equity investments generate minimal profits if any,
    much smaller than R&D expenses incurred. As for the second clause, CEO Joe Chen announced
    many times that, Renren’s vision is never an investment company, and investing in
    non-core areas is for learning and exploring new areas for its future transition (especially
    fintech). In reality, most of the investments of Renren relates to fintech and has high correlation
    with Renren’s Internet business. This kind of investment is very common and we don’t see any
    reason why the company bears a risk to be labelled “Investment Company”. For instance, in
    2005 SEC didn’t label Applied Materials as “Investment Company” even though its investments
    exceeded the size of core business. Since Renren is trying to transform into a fintech company
    and has made good progress in auto finance, keeping fintech investments (e.g. SoFi) is by all
    means reasonable.
    Valuation of SpinCo Is Unreasonably Low
    As of Sep-16, the book value of the “Long-term investments” amounted to US$ 751 million,
    which are based on Renren’s initial investment costs. In fact, the fair value of these investments
    are much higher than the book value, based on conservative valuation methods. For instance,
    company made it clear that SpinCo will include its stake in SoFi. SoFi is the crown jewel of Renren’s
    investment portfolio, and carried US$236mm book value on Renren’s balance sheet as of
    Dec-15 (Renren owned 21.2%). We compiled the history of Renren’s investment in Renren:
    Time USDmm Round
    Sep-12 49 B
    Jan-14 20.8 D
    Jan-15 22.3 E
    OCt-15 150 F
    In total Renren spent US$ 242mm on SoFi shares. In the latest round of financing we are aware
    of, on 30 Oct 2015, SoFi received US$ 1 billion investment led by Softbank and valued it at
    US$ 4 billion. Besides, Renren bought US$10mm SoFI bonds in July 2012. Based on the latest
    round of financing, we believe Renren’s stake should worth US$ 840mm at least. SpinCo valuation
    proposed by management is dwarfed by this single investment. As SoFi’s IPO is approaching,
    if company’s spin-off attempt succeeds, Renren will lost its most valuable asset right away.
    Fair Valuation of SpinCo: US$ 1.5 Billion (US$4.5 per ADS)
    Recall that in 2015 when the CEO and COO of Renren tried to privatize company using
    US$ 4.2/ADS, John Romero and Patrick Small, two individual investors strongly opposed to the
    deal and regarded the offer way too low. In their published letter, Renren’s private equity investments
    alone should worth $4.5 per ADS and total value is $1.5 billion.
    See here:
    http://www.prnewswire.com/news-releases/open-letter-to-renren-special-committee-board-ofdirectors-and-all-renren-shareholders-from-private-investors-300149119.html?tc=eml_cleartime
    And here:
    http://finance.yahoo.com/news/private-investors-see-renren-sum-144831317.html
    In contrast, the current spin-off plan suggested by the CEO Joseph Chen and COO James Jian
    Liu values SpinCo at merely US$500 million, or US$1.47 per ADS.
    As of Sep-16, the book value of RenRen’s “Long-term Investments” amounted to US$ 751 million.
    This figure only reflected the original cost of investment. Due to the rapid growth of invested
    companies, we believe the intrinsic value of Renren’s private equity holdings should be
    much higher than the book value. Thus we have to come to the conclusion that Chen deliberately
    lowered the valuation to exploit minority shareholders for his own benefit.
    SpinCo is the crown jewel of RenRen, but the price offered by management is much lower than
    the previous privatization proposal (to be clear we don’t think “core” business of Renren worth
    much) , let alone the fair value of these assets.
    Furthermore, since the spin-off is for release of locked-up value, all shareholders should be entitled
    to subscribe SpinCo shares. But under the existing proposal, only certain shareholders
    who are both “qualified purchasers” under the Investment Company Act of 1940 and “accredited
    investors” under the Securities Exchange Act of 1934 are eligible for the subscription of SpinCo
    shares. Basically individual shareholders have no choice but take US$ 1.47 per ADS and walk
    away. It is virtually barefaced robbery of minority shareholders.
    Softbank and Special Committee Should Stop The Flagrant Shareholder Oppression
    As a major shareholder of Renren, Softbank Capital Limited can become a part of the spin-off
    consortium. We are hoping Softbank can take a closer look at the assets of SpinCo and ensure
    minority shareholders’ interests are not sacrificed. As a large company with renowned brand, we
    believe Softbank should not ignore such blunt shareholder oppression. Note that Renren has a
    free float of 17% only, since major holders own 83.2% combined (CEO and COO 34.9%, Softbank
    39.7%, DCM 8.6%). If we are talking about individual investors, the stake will become
    even smaller. For a company like Softbank, it would not be worthwhile to join the spin-off and
    put its own reputation at risk, in our opinion.
    Renren management is trying to rip investors off. If Joe Chen is successful, the spin-off case will
    become an infamous footnote of Chinese company’s bad corporate governance and hurt overseas
    investors’ confidence in Chinese company (if any). Hereby we appeal the company to refocus
    itself in business development instead of taking money from small investors, and grow not
    only in revenue but also in business ethics. Renren has become infamous in copying competitors
    in the case of Kaixin. The company has played enough dirty tricks in both business and
    stock market. We hope company should rebuild its values, and we don’t see any future of the
    company, if a company is only good at taking advantage of its shareholders.
    Our Appeals
    Lastly, we would like to restate our strongest opposition to the spin-off, and appeal to the company
    the following:
    1. Call off the spin-off, or else raise the offer price to reflect the fair value of spin-off assets,
    which shall be prepared by an independent third party (instead of company itself)
    2. Current Special Committee includes someone that is not independent, specifically Ms.
    Huang Hui, who was ex-CFO of the company during March 2010 – December 2014. We demand
    Ms. Huang be removed from the Special Committee immediately, because she would
    represent biased interest in her role.
    3. Repeal the restrictions in subscription of SpinCo shares, or propose alternatively to allow
    individual investors to share the upside.
    We can accept any of the following spin-off proposals:
    1. Spin-off after SoFi completes IPO
    2. Remove SoFi from SpinCo
    3. Value SoFi using latest round of financing, if SpinCo must include SoFi
    Sincerely Yours,
    A Group of Renren Individual Investors
    email: renninvestor@126.com
  • V
    ValueSeeker
    $ACRX conversation
    ACRX now up about 100% at the high today since early last week. ACRX SECOND highest volume day in 10 years... ACRX something going on...

    other top holding include $sol $ctra $vvpr $renn $next $gme $sava $kodk
  • S
    StockBard
    $KXIN Massive DD For Those Interested Discusses Everything 😎
    $454,000,000 Combo Agreement + Massive Insider Holdings + 72% O/S Owned by $RENN the Original Parent Company, all on iHub: https://mobile.twitter.com/captainweee/status/1127789978531115008
  • A
    Anonymous
    $RENN conversation
    out $RENN over to KNDI china electric vehicles
  • L
    Lobsterpot1989
    $RENN conversation
    Anyone out there that is in this stock besides me? Soehow I feel things are about to move up wth more hedge funds getting in. I am averaging down. Lost quite a bit on this years ago and I want my money back.
  • b
    brendan
    $RENN conversation
    Valuation of SpinCo Is Unreasonably Low
    As of Sep-16, the book value of the “Long-term investments” amounted to US$ 751 million,
    which are based on Renren’s initial investment costs. In fact, the fair value of these investments
    are much higher than the book value, based on conservative valuation methods. For instance,
    company made it clear that SpinCo will include its stake in SoFi. SoFi is the crown jewel of Renren’s
    investment portfolio, and carried US$236mm book value on Renren’s balance sheet as of
    Dec-15 (Renren owned 21.2%). We compiled the history of Renren’s investment in Renren:
    Time USDmm Round
    Sep-12 49 B
    Jan-14 20.8 D
    Jan-15 22.3 E
    OCt-15 150 F
    In total Renren spent US$ 242mm on SoFi shares. In the latest round of financing we are aware
    of, on 30 Oct 2015, SoFi received US$ 1 billion investment led by Softbank and valued it at
    US$ 4 billion. Besides, Renren bought US$10mm SoFI bonds in July 2012. Based on the latest
    round of financing, we believe Renren’s stake should worth US$ 840mm at least. SpinCo valuation
    proposed by management is dwarfed by this single investment. As SoFi’s IPO is approaching,
    if company’s spin-off attempt succeeds, Renren will lost its most valuable asset right away.
    Fair Valuation of SpinCo: US$ 1.5 Billion (US$4.5 per ADS)
    Recall that in 2015 when the CEO and COO of Renren tried to privatize company using
    US$ 4.2/ADS, John Romero and Patrick Small, two individual investors strongly opposed to the
    deal and regarded the offer way too low. In their published letter, Renren’s private equity investments
    alone should worth $4.5 per ADS and total value is $1.5 billion.
  • A
    Anonymous
    $RENN conversation
    Sold $RENN headed over to CHINA's KNDI 'EVs"
  • m
    millenniumman123
    $RENN conversation
    Usually a spinoff is good news as it will allow them to spin off some bad investments that do not add to their core competency (plus pull down the overall numbers) and give them a clearer offering for people to back and invest in (like the SOFI deals).
    Whats unclear is how we (investors) will play a role in the spin off deals....i.e. if spun off publically, we would normally receive some of that spin off in shares. But with this being a private spin off....lots of questions on how that will look. Sorry I cant offer a clearer answer but hope that helps a little. GLuck
  • j
    josh
    $RENN conversation
    WOW..moving up fast..and no News?
  • I
    Iaxgbby
    $RENN conversation
    #RENN is jumping after the report of Q2 results .On watch for breakout at 2.26. Target: 2.64 at stoxline.
  • A
    Anonymous
    GameStop Corp.
    GME up 50% last wk, doubled past month! :-) $NEXT monster move last wk up over 130%! $RENN explosive wk up over 80!! Also, ACRX up 50% last week on Buyout chatter... My watch list :-)))
  • m
    millenniumman123
    $RENN conversation
    My guess (speculation) is that this movement will mean that RENN is going to be a SoFI play and institutional investors are buying up shares before that's announced. If its a stand alone SOFI play, this could be a SHORT SQUEEZE ahead! GLuck longs.....
  • q
    quinlan
    $RENN conversation
    According to the guidance, RENN may be selling the SOFI stake and then issuing a special dividend to investors.
  • b
    brendan
    $RENN conversation
    If Renn shareholders do not receive atleast $5/per share for Sofi stake as well as all the other VC holdings on their books, then the insiders should be held accountable for not representing all shareholders....read below

    Valuation of SpinCo Is Unreasonably Low
    As of Sep-16, the book value of the “Long-term investments” amounted to US$ 751 million,
    which are based on Renren’s initial investment costs. In fact, the fair value of these investments
    are much higher than the book value, based on conservative valuation methods. For instance,
    company made it clear that SpinCo will include its stake in SoFi. SoFi is the crown jewel of Renren’s
    investment portfolio, and carried US$236mm book value on Renren’s balance sheet as of
    Dec-15 (Renren owned 21.2%). We compiled the history of Renren’s investment in Renren:
    Time USDmm Round
    Sep-12 49 B
    Jan-14 20.8 D
    Jan-15 22.3 E
    OCt-15 150 F
    In total Renren spent US$ 242mm on SoFi shares. In the latest round of financing we are aware
    of, on 30 Oct 2015, SoFi received US$ 1 billion investment led by Softbank and valued it at
    US$ 4 billion. Besides, Renren bought US$10mm SoFI bonds in July 2012. Based on the latest
    round of financing, we believe Renren’s stake should worth US$ 840mm at least. SpinCo valuation
    proposed by management is dwarfed by this single investment. As SoFi’s IPO is approaching,
    if company’s spin-off attempt succeeds, Renren will lost its most valuable asset right away.
    Fair Valuation of SpinCo: US$ 1.5 Billion (US$4.5 per ADS)
    Recall that in 2015 when the CEO and COO of Renren tried to privatize company using
    US$ 4.2/ADS, John Romero and Patrick Small, two individual investors strongly opposed to the
    deal and regarded the offer way too low. In their published letter, Renren’s private equity investments
    alone should worth $4.5 per ADS and total value is $1.5 billion.
  • L
    Lobsterpot1989
    $RENN conversation
    I am thinking this is a coiled spring and ready for a huge run soon. We will see if I am right.
  • B
    Bridger
    $RENN conversation
    Curious -- the board/CEO is worried about being “deemed” an investment company. Surprise ---- the Board/CEO is one that made all of the investments in the first place. At best this is disingenuous. The CEO/Board have acted since the IPO in the interest of senior management. Period. This is another example of CEO/ Board again seeking to manage an outcome in advance of good news from SOFI or some other investment that they have made that has done very well and is ready to bloom ( go public or some other good news event). If you agree that the CEO/Board has not acted in the interest of the shareholders since going public then you can easily imagine a private Chinese Spinco company with dubious governance and no reporting ( not that RENN is any good at reporting anyway). Safe to say that is when the next stage of looting begins. I would think there will reputational risk to the CEO and board members going forward and I would think Softbank who must give their approval needs to be careful about getting caught in the mud. In this case and at this time it is appropriate to use the quote that is in fashion ---- " this is rigged!".
  • A
    Anonymous
    $RENN conversation
    Cut your losses $RENN check out KNDI EV's of China breakout!
  • O
    Other
    $RENN conversation
    sell to bidu
  • C
    Chris L.
    $RENN conversation
    Thinking about making a play on this one. Very low valuation considering the SOFI stake. I think if it gets down to $500 market cap, ill take a stab at it. I noticed in the filing that the rights for SpinCo and access to SOFI are pro rata, up to 80%. Can anyone here explain what that means?