China's Facebook IPOs

China's Facebook IPOs: "It's Overvalued, But People Are Going To Buy It Anyway"

Read more: http://www.businessinsider.com/chinas-facebook-ipos-its-overvalued-but-people-are-going-to-buy-it-anyway-2011-5?utm_source=facebook&utm_medium=social&utm_term&utm_content&utm_campaign=sai#ixzz1LIQoDcml

RenRen CEO Joe Chen


RenRen, the "Facebook of China", is going public today at a huge valuation. The valuation is 67X revenue, versus 25X revenue for Facebook's private markets valuation, Bloomberg says.

RenRen says this is justified because it has much more growth ahead of it than Facebook, which makes some sense. RenRen also has daily deal and social gaming sites, so it's a diversified business.

But that's not the real reason why the valuation is so high. The real reason is obvious: investors want Chinese internet stocks really, really badly. Bloomberg quotes a fund manager who sums up how everyone feels: "You can say it’s overvalued, but people are going to buy it anyway."

Indeed.

Read more: http://www.businessinsider.com/chinas-facebook-ipos-its-overvalued-but-people-are-going-to-buy-it-anyway-2011-5?utm_source=facebook&utm_medium=social&utm_term&utm_content&utm_campaign=sai#ixzz1LIRAGViu

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