A man walks past the office entrance of Sina Weibo in Beijing. The company has raised less-than-expected $286m in the US IPO.
China’s Weibo Corp, a Twitter-like messaging service company, raised a less-than-expected $286mn after it cut the size of its US initial public offering amid a sell-off in technology shares and concerns about slowing user growth.
The offering comes ahead of the much-anticipated IPO of Chinese e-commerce giant Alibaba Group Holding, which holds stake in Weibo.
Alibaba is expected to raise about $15bn this year in what could be the biggest internet IPO since Facebook’s listing in 2012. Weibo, controlled by Web portal company Sina Corp, sold 16.8mn American depositary shares (ADSs) at $17 each, the company said yesterday.
At the offer price, Weibo is valued at $3.46bn.
Weibo’s shares were due to start trading on the Nasdaq yesterday under the symbol “WB.” The company, whose name means “micro blog” in Chinese, had earlier planned to sell 20mn ADSs at between $17 and $19 each. The company priced the shares at the lower end of the range because of the recent stock market turmoil, particularly in technology shares, a banker who worked on the IPO told Reuters.
Weibo also intentionally sold fewer shares than initially planned to lower dilution. “We wanted to have a deal that works from a market perspective,” said the banker, who declined to be named because he was not authorized to speak to the media.
There has been a pullback in the equity markets as fears of stretched stock valuations turn investors to safer sectors such as utilities.
High-flying technology and biotechnology shares have borne the brunt of the pullback, with the tech-heavy Nasdaq Composite index recording its biggest drop in two-and-a-half years last week.
Since its launch in 2009, Weibo has become China’s water cooler, where nearly 600mn Internet users discuss everything from Korean soap operas to China’s politics.
Like many other Internet firms, the company has to operate in a heavily censored and tightly controlled media environment in China.
A rule that took effect in September imposes a prison sentence of up to three years on people who knowingly share false information online.