I guess we now know why Renren (NYSE:RENN) scheduled its third-quarter earnings report for Thanksgiving Eve when few in this country would be paying attention. China's once fast-growing social networking website operator posted uninspiring financial results and devastating guidance after Wednesday's market close. 

Revenue fell 6% to $47.6 million in the third quarter, as a 36% surge at its small group-buying site Nuomi was more than offset by a 10% decline at its larger namesake social networking website. Revenue dipped sequentially and year over year, and the company that was once able to mask the decline in display advertising at its social site by growing in online gaming and flash sales is history. 

Baidu (NASDAQ:BIDU) acquired a controlling 59% interest in Nuomi this summer, and Renren's run into so many obstacles in online gaming that it's delaying some releases and restructuring the subsidiary.

Renren's adjusted net loss widened to $0.07 per ADS, but that's actually better than the $0.11-per-ADS shortfall that analysts were targeting. 

Investors buying into Renren have accepted the red ink. It comes with the territory of group-buying sites and online video where its 56.com site is gaining in popularity. However, investors have put up with the quarterly deficits in exchange for growth. They're not getting it these days, and it's about to get far worse.

Renren's outlook now calls for revenue to fall by at least 36% to between $29 million and $31 million. This is clearly woefully short of the $48.9 million that Wall Street was forecasting. That's brutal. Most stocks would take a bigger beating than Renren's suffering today for that kind of meltdown, but it naturally helps to have roughly $2.80 per ADS in cash and investments on your balance sheet. As bad as things may be these days, Renren's sitting so close to its cash cushion that it's practically being given away.

There are reasons for that, naturally. Renren can't keep losing money without eating into its reserves. There also has to be some disillusionment to unloading a majority stake in Nuomi to Baidu. Yes, Nuomi is a money pit, but the growth was clearly compelling enough for China's leading search engine to want in. The transaction may have been initially applauded by the market, but it's not as if having a working relationship with Baidu is going to make its social hub any more magnetic. 

Renren may be trading dangerously close to its enterprise value, but sometimes you get what you pay for on Wall Street.

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