Maya Reports


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It’s raining (social-networking) IPOs

The Oracle has spoken… with his thoughts on social-networking IPOs:

Most of them will be overpriced,” [Warren] Buffett, chairman and chief executive officer of Berkshire Hathaway Inc., said… ”It’s extremely difficult to value social- networking-site companies… Some will be huge winners, which will make up for the rest.”   Bloomberg BusinessWeek, 3/25/11

But that hasn’t stopped a parade of social-networking companies from preparing themselves to go public.

Renren Inc., China’s equivalent to Facebook, went public on May 4th.  It’s the first social-networking site to do so.

The stock rose as high as $21.93, or almost 56.6 percent above its $14 IPO price in its first day of trading on the New York Stock Exchange before closing at $18.01, or 28.6 percent, above the IPO price.            Reuters, 5/4/11

Not to be the bearer of bad news, but as of end-of-day/closing bell Wednesday (May 11th), RENN‘s stock stood at $13.49.  That’s lower than the initial price.

What does this mean for Facebook, which is planning to go public next year?  And don’t forget LinkedIn, which is planning to join RENN with its own stock – LNKD – later this month.

On March 10, 2000, the dot-com bubble burst…is the social-networking IPO bubble going to burst in late 2011/early 2012?


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