A Rough June for Renren: But Still Over-Valued at Half-Price?

June has come and gone, leaving a lot of investors wondering if they’re either holding on to a new Chinese tech IPO bomb, or in the right spot to grab a bargain. Chief among these is Renren.com (NYSE:RENN), which lost just over 31% of its value in June, taking it to a 50% drop since its IPO first day in early May.

Even the online dating site Jiayuan.com (NASDAQ:DATE), which is seen as a more solid long-term bet – a seemingly well-run matchmaking site in a nation of too many bachelors, with 44% of the market share in online dating in China – took a bit of a dive in June (see the graph, below), though it now remains 8% up on its initial IPO price.

Focusing on Renren, then: reports of accounting irregularities just before its IPO started everything off on the wrong footing, and being caught exaggerating its monthly unique visitors – which are up 19% in Q1, not the adventurous figure of 29% – left some wondering if they’d backed China’s MySpace rather than the media’s beloved label of “China’s Facebook”. Also, had western investors fully considered the weight of the competition, from Sina Weibo to Tencent Pengyou? The June jitters suggest that some of these realities dawned.

Renren Inc.’s 2011 Q1 unaudited results, their first since their IPO of course, dropped on June 21st , showed net revenues and online advertising revenues up, whilst losses narrowed. The RENN stock picked up slightly, to end a rough month of June on a small uptick.

It’s possible that Renren.com will hold water – and that its investment in group-buy site Nuomi will prove to be visionary – and was just unlucky to suffer the most in a month when the Longtop fraud hit China’s tech IPOs, and exposed incompetence at Deloitte, and saw two Chinese firms delisted from NASDAQ.

It’s also conceivable that $RENN remains over-priced for its consistent financial under-performance, relative to some more mature Chinese tech firms. Let’s see if July is another month of Chinese IPO rollercoaster rides.