Sina Weibo announces plans for IPO
Philip Ellison 26 February, 2014 at 09:02
Chinese microblogging site Sina Weibo has revealed plans to go public, presumably buoyed by the hugely encouraging precedent that Facebook set last week when it cemented plans to acquire WhatsApp for $19 billion. According to the Financial Times, Sina Corp, the internet platform behind Weibo, has reportedly hired Goldman Sachs and Credit Suisse to manage the company’s flotation.
Weibo’s actual value is a subject of some debate, with Nomura analysts putting it at approximately $3.7 billion (using Twitter’s 2011 valuation as a point of reference) and Piper Jaffrey concluding that it could be as high as $6 billion. However, Sina will only be seeking in the area of $150 million in the IPO, so it stands to reason that hefty ownership stakes will not be on offer. 71% of Weibo is currently owned by Sina; e-commerce giant Alibaba paid $586 million for an 18% stake last year.
Weibo claims to have over 500 million registered users. However, censorship is a continuing issue, and that is unlikely to change in the near future. “Sina Weibo is certainly not immune to the censorship of the Great Firewall of China,” writes Adam Pasick at Quartz. “Users regularly play a cat and mouse game with censors who take down posts on forbidden topics.” Sina maintains a cumulative list of banned keywords and runs a team of censors to monitor and shut down posts about scandals and political events that it deems too controversial.
Investing in internet stocks in China is proving a popular option at the moment, with WeChat (a messaging app similar to WhatsApp) helping to boost parent company Tencent’s shares. This week, Sina revealed net profits of $44.5 million in the final quarter of 2013, marking year-on-year growth of over $42 million. A statement by chief executive Charles Chao outlines Sina’s current plans to “continue to focus on growing Weibo’s user base and user engagement.