Renren is owned by Oak Pacific Interactive who plan to raise about $500 million in an initial public offering managed by Deutsche Bank, among others, the Financial Times reported, citing two unnamed people close to the situation.
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Officials from the company were not immediately available for comment.
The Chinese site, whose name means “everyone” and was founded a year after Facebook in 2005, has 160 million users and is the most popular social networking site in China, where government censors have blocked Facebook.
With Facebook not yet listed, Renren could become the target for investors seeking to cash in on the social networking sector, according to Financial Times coverage of the situation.
Bloomberg, who cited three people with knowledge of the plan, said the company was preparing an IPO of about $500 million. Morgan Stanley had also been hired, though Morgan Stanley could not reached for comment.
The situation is the same for microblogging sites. Twitter is not public, but investors can buy stock in Chinese internet giants Sina, Tencent or Sohu, which all operate Twitter-like — closely monitored — services.
According to Fraser Smith, a Shanghai-based IT consultant, social networking sites such as Renren and Kaixin001, which operate like Facebook, have grown in popularity in China in recent years. They earn most of their revenue from online advertising and benefit from a market closed to major foreign competition.
Renren does not publish financial data but has said its advertising revenues more than doubled last year and in 2009, the newspaper reported.
For investors who want to ride the wave of social media, Renren may be one of the last major opportunities to cash in, given recent sales of stakes in Facebook lately. As Facebook is not yet listed, Renren could become virtually the only choice for investors seeking to buy into the sector’s growth, as the Financial Times explains. The situation is similar with microblogs. While Twitter is not listed, investors can buy shares in Sina, Tencent or Sohu, the Chinese internet portals which all operate microblog services.
