China's Internet companies have been pumping cash into U.S. tech start-ups, riding the latest wave of hyper growth and soaring valuations.
Now, one of those Chinese investors finds itself at the center of a heated cross-border financial dispute.
Renren, a struggling social network that trades on the Nasdaq and was once dubbed the "Facebook of China," received a $1.4 billion offer by the company's top two executives in June to take it private.
Not so fast, says a group of Renren shareholders.
They claim that the proposal dramatically undervalues Renren's stakes in U.S. start-ups, namely its 25 percent ownership of online lender SoFi, which is said to be raising money at valuation of about $3 billion.
"It's a total low-ball offer," said John Romero, founder of Aptus Capital in Birmingham, Alabama, who wrote a letter to the Renren board on July 24, calling the deal "offensive and ludicrous." Romero owns the shares personally and was writing as a private investor.
Renren's board plans to form a special committee to consider the proposal. A representative from the Beijing-based company didn't respond to requests for comment.