Linkedin, Renren IPOs raise Social Media yellow alert

Watch what has happened in social media industry ever since May 2011. The following are mainly extracted from FT.com. Reuters reports.. credits go to these guys.

1. Renren.com (人人网) , the “Chinese Facebook”, is currently valued at nearly 100 times last year’s net revenues of US$76.5m. It is now trading within the range of US14 to 12 per share. The China largest social networks company’s website offers services ranging from games, music to shopping. It boasts social connection to its more than 117 million active users. The company also hosts sites for online games, social commerce and deal shopping, and business and professional networking.

2. Last week, social media site operator Linkedin went public with an initial public offer (IPO), it’s now trading at the range of US$90 per share. Analyts said the professional social media site last year’s earning was about US15 million, its price earning ratio (PE) can be as high as 500 times. Listen up, the company also disclosed in its prospectus that it does not expect to be profitable in 2011.

Linkedin IPOs

3. Microsoft’s mammoth US8.5 billion bid for internet communications company, Skype, leaving many question marks behind the deal – is it overpaid?

4. Facebook, which is expected to go public in April 2012, was valued at US $70 billion in recent sales of the company’s private shares, up from $50 billion at the beginning of the year.

5. Groupon, which brings people together for deals, has had talks with bankers about an IPO that could value it at US$15 billion to $20 billion.

Are these familiar to you? For those who has experienced through internet bubble burst in October 1999 would not forget the indicators:

Investors are going after newly-listed companies without taking its business models and revenue growth into account. Stock prices shoot up with rocket high PE ratio.

Similar start-ups are lining up for IPOs before the market crash

Huge merger and acquisition deal takes place - AOL took over Time Warner. They got divorced after 9-year sour marriage.

TG is not a stock analyst, but has been in dotcom era before, I just see signs keep popping up. Is history going to repeat itself? I won’t be able to tell…My blog however is going to be a witness and I am going to record it this time.

Likewise, I am not the only one who has this concern. Check out Wall Street Journal’s internet bubble talk.