Media
Renren Relevance Fight: Acquires User Generated Video Site 56.Com (RENN)
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Renren Inc. (NYSE: RENN) is trying to prove that it has both clout and relevance. The company has announced the acquisition of all interest in 56.com, an online video-sharing site founded in 2005 which allows users to upload, share, and view videos.
The price tag is listed as $80 million in cash and the deal is expected to close this fall. This site is user-generated content and its content mix is said to be in performing artists, amateur groups, and video enthusiasts.
Renren is one of our most recent “most mispriced IPOs of 2011” and the company’s goal here in this acquisition is to “drive growth in user engagement, traffic, and advertising solutions to clients.” We have not been too nice to the company nor to its underwriters and this is an obvious aim for the company to show that it is relevant.
56.com claims to have received investments from venture capital firms such as Sequoia Capital, Steamboat Ventures, CID Group, and SIG.
So far investors are treating this as a win for Renren as shares are up about 5% around $5.65 in pre-market trading. Its post-IPO range is $4.96 to $24.00.
JON C. OGG
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