Remember the hype around E-Future (EFUT) 5 years ago? It reached $48.00 per share to a market cap of about 144mm and a price to sales ratio of just under 30 vs. RENN's of Over 50.
Efuture has since grown revenues at 35% average clip since the IPO - which is pretty good - all things considered. Meanwhile the share value has lost over 90% since the peak and is trading now for $4.33.
Now Efuture trades at a Price/Sales ratio of 0.67 vs. RenRen's current price/sales ratio of 63.19 - about 100x more richly valued. While Efutures contract backlog grew at 100%, which purports to higher growth in 2011... Renn's growth is slowing down over the last few months.
How could one justify RENN's value at 100x steeper valuation vs. Efuture when they are both growing at comparable rates?
Moreover, Efuture has gone way over the top to be fiscally transparent, doing considerably more than their much larger US-Traded Chinese counterparts in providing very detailed financial reporting. Renn's CFO stepped down due to fraud allegations that ended up being right on... while lying about their user-growth just shortly before the IPO, inflating the growth by 10% vs. reality.
Just some thoughts... thinking of potentially building a short position here.