Beyond games, Renren has other assorted businesses including a group buying site called Nuomi.com and an online video site called 56.com. Both are in the top five in their respective categories and have been growing.
Nuomi appears to be on the cusp of profitability after a lot of steep losses for the past couple of years. The Chinese group buying market has thinned out considerably and Nuomi appear to be benefitting from that consolidation.
The big thing for me in getting long the stock is that cash balance. You're basically getting a company that is close to breakeven for its cash value. If it shows solid progress in any or all of their core businesses, I could see this stock doubling by the summer. If it doesn't come through this quarter, it will probably pull through in the quarter following. I like the risk/reward here.
At the time of publication, the author was long RENN and SINA.
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