Q2'13 Earnings led to a sharp sell off in the counter, and it has corrected significantly from the highs made on the day before the release. Based on the performance and the guidance for Q3'13, Deutsche Bank downgraded Renren from Hold to Sell with a price target of $2.40 (earlier $2.89). The reduced target is significantly below the current market price. The revenues came in lower than expected, though they were in line with the preliminary release a few weeks ago. The operating losses continued to increase. The figure of $34.7 million, was much higher compared the operating loss of $22.2 million in Q2'12. Importantly, the operating loss was higher than the preliminary figure of $29-$30 million released recently. For Q3'13, the guidance is for revenues in the range of $47 million to $49 million. This is a 3%-7% yoy decline. This is about 23% below what the street had estimated. The company quoted major delays in gaming pipeline, for both online and mobile, as reasons for the expected decline in revenues. The analysts stated that the ad revenues had stagnated due to a shortage of inventory. Further, they expect the operating losses to widen in view of continued investment in the Nuomi and slowdown in the gaming segment. The net revenues were $43.4 million, which comprised of online game revenues ($22.8 million), IVAS ($5.2 million), and online advertising ($15.4 million). Gaming is the mainstay of the company, and online advertising, the other major contributor, is also changing rapidly. Native advertising / social media sponsorships is picking up, and IZEA (IZEA), a company in this space posted record numbers recently. Renren is trying to make a transition to leverage the increased usage of internet on mobiles. That may take some time to have its full positive impact. However, the numbers and the guidance have dented the sentiments for the stock a bit.