When Chinese social network operator Renren (NYSE: RENN) geared up to go public this spring, fellow Fool Tim Hanson told you to stay away from the too-hot stock. That turned out to be great advice.

Today, Renren shares are worth less than half of the first trading day's closing price, not to mention the overheated intraday highs of $24 that some unlucky market gambler got stuck with. And last night's debut performance on the earnings stage only cemented what we knew: This company ain't worth $5 billion or more, as early investors thought it might.

Sure, it's a heady growth story: Renren added about 10 million active users year over year, to land at 33 million. It drove revenue 47% higher to $20.6 million. I find it slightly unsettling that most of the growth came from higher advertising revenue, while the more sustainable subscription services lagged far behind. But hey, fair enough -- as a Google (Nasdaq: GOOG) shareholder myself, I can't really complain about an ad-based business model. Management expects this growth rate to hold steady in the next quarter, but it doesn't offer any projections beyond that.

But the purported "Facebook of China" is losing money amid ballooning operating expenses, as Renren steps up its marketing efforts along with more R&D. That is, of course, the right thing to do, as competition in Renren's space heats up: SINA (Nasdaq: SINA) is already a giant in China's nascent social networking scene, and there are rumblings that the actual Facebook plans to enter this market by partnering with Baidu (Nasdaq: BIDU).

If that comes to pass, the formidable duo will surely pick most of Renren's low-hanging fruit. That'd be the end of the high-growth salad days and the still-generous valuations they allow.

Paired with the lack of enthusiasm for stateside Internet IPOs LinkedIn (NYSE: LNKD) and Pandora Media (NYSE: P) in recent weeks, it looks like the much-feared second coming of the online bubble never materialized. Those early pops were fueled by limited supply and speculative demand for each stock, and they faded very easily.

At some point, Renren and friends will get cheap enough to merit serious investors' attention. That day is not today. Just add Renren to My Watchlist to keep an eye on what develops, and you'll be ready to make a move when the time is right.

Fool contributor Anders Bylund owns shares of Google, but he holds no other position in any company mentioned. Click here to see his holdings and a short bio. The Motley Fool owns shares of Google. Motley Fool newsletter services have recommended buying shares of Sina, Google, and Baidu. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.