"China's Facebook" surges on IPO

Shares of Renren (RENN.NYSE) surged 29% to close at $18.01 on its first day of trading on the New York Stock Exchange, as the company became the first social-networking site to conduct a public offering in the US, Bloomberg reported. The Beijing-based company raised US$743.4 million through the sale of 53.1 million American depositary receipts, after pricing its offering at the high end of the proposed range of US$12-14, and an additional US$111.6 million through an overallotment option with underwriters. The $14 price tag values the social networking company at 72 times last year’s sales revenue, nearly three times the valuation that Goldman Sachs’ (GS.NYSE) recent investment gave Facebook, which is banned in China. The company had 117 million users as of March 31, according to its prospectus, less than a quarter of the more than 500 million users Facebook has globally. Renren operates a group-buying site, nuomi.com, and an online games site in addition to its social network. Renren was one of 34 companies that announced plans for US IPOs in April, making this the busiest month for new filing since August 2007, according to research from US-based IPO investment firm Renaissance Capital.