Economy

Renren surges on 1st day of trading

(Agencies)
Updated: 2011-05-05 10:44

NEW YORK - Shares of Renren Inc., which runs an online social network in China, rose in their market debut Wednesday after the company priced its initial public offering at the top of an expected range.

Shares traded up 37 percent at $19.20 in morning trading while the broader markets edged lower.

The company is raising about $743.4 million from the sale of 53.1 million American depositary shares at $14 each. One ADS is equal to three ordinary shares of the company.

Renren indicated in a regulatory filing that the offering was expected to price between $12 and $14 per ADS.

The Beijing company is offering about 42.9 million ADSs, while selling shareholders are offering approximately 10.2 million ADSs. The company will not receive any proceeds from ADSs sold by the selling stockholders.

Renren is giving the underwriters a 30-day option to buy up to an additional 8 million ADSs to cover any excess demand.

The company said in the filing that it plans to use net proceeds and concurrent private placements to invest in its technology and research and development; to expand its sales and marketing operations and for general corporate purposes such as potential acquisitions and investments.

Renren reported a loss of $64.2 million in 2010 on revenue of $76.5 million.

Renren is listed on the New York Stock Exchange under the "RENN" ticker symbol.