Having an overachieving sibling can be a real pain in the back, as many people can tell you. There are also at least that many other people who will tell you having a big brother who fails is just as bad.
Shareholders of Renren, Inc. (NYSE:RENN) must have a pretty good idea of how that works. On Friday RENN closed up 1.62% at $3.76. Just 3 months ago the price was around $6.60, and the obvious reason for the disastrous drop was Facebook’s dismal IPO performance.
A day before RENN announces Q2 earnings, the question on shareholders’ minds is whether the company will manage to provide results impressive enough to get out of Facebook’s shadow.
Estimates show that analysts generally agree RENN won’t be able to turn profitable by the end of 2013, but at the same time revenues are expected to grow and losses to shrink. The outcome is largely dependant on how the company fares with the switch of user focus from desktop to mobile and the approach to monetizing on mobile usage.
When RENN announced the unaudited results for the fourth quarter of 2011, the price surged, despite the fact RENN failed to meet earnings estimates for the last quarter of 2011. Back then, however, a lot of people were still hyped over the Facebook IPO, and now things have changed dramatically.
Now RENN’s is facing more than its own shortcomings and the slowing growth of the economy; what the company has managed to do will also be weighed against the huge disappointment from the underwhelming performance of the big brother.
