Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of Chinese social media company Renren (NYSE: RENN) sank as low as 11% on Friday after quarterly results and guidance disappointed Wall Street.  

So what: Renren has been investing heavily to deal with increasing competition, but its third-quarter results -- a loss of $1.2 million versus a year-ago profit of $7.3 million -- show just how costly the battle is becoming. Management is trying all it can to gain a competitive edge over social-networking sites like SINA (Nasdaq: SINA) and Tencent Holdings, but given the stock's whopping 70%-plus year-to-date decline, it's clear that Wall Street remains highly skeptical.

Now what: Expect more short-term turbulence. Renren now sees fourth-quarter revenue of $31-$33 million, which is below the average Wall Street forecast of $35.7 million. Management did say that they will keep buying back shares under the opinion that they're "severely undervalued," but given the worrisome margin trend, I wouldn't be quick to follow their lead.

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