Things Never End Well, Otherwise They Would Never End
Why bubbles will continue to happen. And why the tech bubble in the US and China are destined to end badly.
Read the full post at Forbes here.
Showing posts with label Chinese IPOs. Show all posts
Showing posts with label Chinese IPOs. Show all posts
Thursday, July 07, 2011
Friday, July 01, 2011
Wall Street Journal China Opinion: 谁将是通吃的赢家？
Who will be the winner of the "Winner-Take-All" strategy in China's Internet Space?
Read the full post in the WSJ China.
Monday, June 20, 2011
RenRen Losing Friends
By Eric Jackson I recently returned from a two-week trip to China and had the chance to talk to many people within the Internet space over there, as well as a number of users. I didn't meet with RenRen management. Nonetheless, the view that I got from my various conversations is that RenRen is in trouble. It was a very popular social-networking service in China, but much of its user base has shifted this year away from RenRen and over to Sina (SINA -commentary - Trade Now) Weibo. I interview a young applicant for an analyst position for which my firm is hiring there, and she said she used to spend most of her free time on RenRen because all of her friends were on it. But more recently, she said, they'd all move over to Weibo, so she migrated as well. I heard similar stories from many others. Some of this was foreshadowed in the RenRen IPO filing. The company clearly demonstrated that its revenue and active users had hit a flat line in the first quarter of this year. Early buyers of the stock post-IPO hoped this pause was only temporary. But based on my discussions, the trends have, if anything, continued to further go against RenRen's favor. The company raised an enormous amount of money -- $800 million. To put that in perspective,Mecox Lane (MCOX - commentary - Trade Now), whose management I did meet, was a hot Chinese IPO last November, and it only raised about $100 million. So the RenRen bulls can argue that this company has a lot of resources to figure out its business model and try to restart its growth. While that's true -- and kudos to them for hauling in the money that they did -- I don't believe that's a reason to hold the stock.
RealMoney Contributor
6/16/2011 10:00 AM EDT
Click here for more stories by Eric Jackson
RenRen (RENN - commentary - Trade Now) recently had its initial public offering to great fanfare, and its best price was moments after it started trading. Ever since, it's basically been straight down to $7 -- two-thirds less than its initial post-IPO price.
Thursday, June 16, 2011
A Chinese Revolt on a Plane
There are definitely cultural differences between Americans and Chinese. Here's a personal story to illustrate how different they are -- and why it shows how the government needs to tend to the people's needs.
Read the full post on Forbes.
Tuesday, April 26, 2011
Wall Street Journal China Opinion:中国科技股正面临泡沫危机吗？
My latest opinion piece from the WSJ China on why Chinese Internet stocks are still not in a bubble.
Read the whole post here.
Tuesday, April 19, 2011
Wall Street Journal China Opinion: 为什么人人网不是中国版的Facebook?
My take on the upcoming RenRen ($RENN) IPO and why Americans love calling it the "Facebook of China" even though it's not.
Read the full opinion in WSJ China here.
Monday, April 18, 2011
RenRen Is Set to Ride the Chinese IPO Train
By Eric Jackson That's pretty much all it takes these days. It's not unreasonable to expect its valuation to easily double or triple when it goes public, just as it did with Youku.com (YOKU - commentary - Trade Now) and Dangdang (DANG - commentary -Trade Now) in December, and Qihoo 360 (QIHU -commentary - Trade Now) last month. It will actually be interesting to see whether -- expecting another hot placement from investors -- the RenRen investment bankers will try to up the offer pricing to capture more value for the listing company, rather than pad the bank accounts of the investment banks' institutional clients. Remember how Dangdang's CEO got into a Twitter-style scuffle on Sina's(SINA - commentary - Trade Now) Weibo, supposedly with one of the Morgan Stanley bankers, after their IPO a few months ago? The CEO complained -- among other things -- that the bank hadn't priced the offering high enough to benefit the company's coffers. With Sina riding sky high these days and new private valuations for Facebook and Twitter seemingly every week, it's hard to see how RenRen doesn't have a great initial pop next week. The company booked $77 million in revenue last year with an operating profit of $8 million. Though it still had a net loss for the year, revenue grew 64% from the prior year. RenRen describes itself as the leading real-name social networking Internet platform in China, as measured by total page views and total user time spent on social networking websites. RenRen stated in its initial filing with the Securities and Commission that it had 117 million "activated" users at the end of March. It also said that, according to consulting firmiResearch, monthly total page views are 2.3 times higher than those of its closest competitor. [*** This post is an excerpt of the full article, available by clicking here to go to RealMoney.com. Note: subscription required. ***]
RealMoney Contributor
4/18/2011 1:40 PM EDT
Click here for more stories by Eric Jackson
If all goes as planned, RenRen, the "Facebook" of China, will go public in the U.S. in early May under the ticker "RENN." It hopes to raise nearly $600 million and be valued at over $11 billion.
On the surface, the company has all the makings of another mega-Chinese initial public offering. It has two of the more prestigious investment banks managing the IPO: Morgan Stanley (MS -commentary - Trade Now) and Credit Suisse (CS- commentary - Trade Now). And, most important, it is a Chinese company involved in the Internet.
Thursday, December 09, 2010
Rip-Roaring China IPOs
By Eric Jackson Dangdang ended its first day of trading up 87%. Youku ended up 161% for the day. It feels like 1999 all over again. However, any time you see moves like that, you will get the chorus of worriers. "These price-to-sales ratios are crazy!" is one comment I heard during yesterday's market action. "This is going to end in tears!" One more: "I'm going to short the hell out of these two stocks." I wrote about Youku being the monster China IPO two weeks ago, though I'm not some Pollyanna cheerleader. Still, even I was surprised by the giant move the stock made yesterday. The critics of Youku point out that the company has raised more than $100 million from venture capitalists to date, and that it has yet to turn a profit. In fact, Youku's losses have only grown along with the company itself. It has faced increasing costs of acquiring proprietary content (think Hulu), keeping up with intense competition, paying for more servers to stream video and large pirating risks. Even if the company can supplement its advertising-based revenue with subscription revenue, critics wonder how will it will convince the Chinese to pay for content when bootleg DVDs can be bought for pennies on the street. Yet, what Youku has going for it -- as I've said before -- is that it's the leader in the online video space at the moment. China's No. 2 online-video company, Tudou, filed to go public first, but Youku is actually the first one out. If it didn't have name recognition in the U.S. before yesterday, it does now. That will be important for Youku's continued access to the capital markets in order to fund its growth -- assuming its price holds up.
RealMoney Contributor
12/9/2010 11:30 AM EST
Click here for more stories by Eric Jackson
Wednesday's price action in the new Chinese initial public offerings in Youku (YOKU -commentary - Trade Now) and Dangdang (DANG- commentary - Trade Now) was eye-popping. Americans love easy comparisons to for understanding foreign businesses, so we've heard endlessly heard that Youku and Dangdang are China's YouTube and Amazon (AMZN -commentary - Trade Now), respectively.
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