Weibo jumps in US debut after undersubscribed IPO
Print Edition
SHARES of Sina Weibo, dubbed as China’s version of Twitter, jumped over 10 percent initially during its debut in New York yesterday after an undersubscribed initial public offering.
Ten minutes into trade the shares of China’s most popular microblogging service topped US$19, compared with the US$17 IPO price.
Weibo started trading on Nasdaq under the “WB” ticker symbol.
Weibo’s parent, the Chinese Internet giant Sina Corp, had sought to offer 20 million shares at US$17-19 apiece to raise as much as US$380 million listing the subsidiary on Nasdaq, but only pulled in US$286 million after selling 16.8 million American Depositary Shares at the low end of the price range as it ran into a market jittery over both technology and Chinese company shares.
But retail buyers bought the shares despite a weak market overall.
The underwhelming IPO valued the Beijing-based company at US$3.46 billion, more than halved from a target of US$7-8 billion the company set at the beginning of this year.
“We’re satisfied with the result as the pricing is still in the expected range despite a gloomy market environment due to the selloff of technology stocks,” said Charles Chao, chairman of Weibo.
Chao said the company will continue to improve user experience by providing convenient information sharing services at both mobile and PC devices while building a social media marketing system including mobile advertising, e-commerce and mobile payment.
The Weibo IPO came amid a selloff in global technology firms that has sent the Nasdaq index down for over three weeks, while concerns about the microblogging service’s profitability and diminishing user engagement also damped market appetite.
The microblogging site has witnessed an explosion in user growth since it launched in August 2009. It has gone public while it’s unprofitable.
Weibo claimed 143.8 million monthly active users as of March, with the daily active users reaching 66.6 million. It reported a net loss of US$47.4 million in the first three months of this year, widened from US$19.2 million in the same period of last year.
Weibo has been beefing up efforts to monetize the widely-used site by allowing small merchants and online vendors to push notifications or send subscription content to their followers.
However, there are complaints that feeds with spam and advertisements hurt surfing experience and users are shifting to WeChat, a more private mobile messaging app developed by Tencent Holdings Ltd.
Weibo’s offering came ahead of the much-anticipated IPO of Chinese e-commerce giant Alibaba, which holds stake in Weibo.
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