After getting frozen out of the U.S. market a few years ago, Chinese companies are scrambling to list in the U.S. More than a dozen Chinese companies have filed for an IPO so far. Micro-blogging giant Weibo began trading in the U.S. Thursday but things didn’t go quite as planned. Karina Huber reports.
Weibo shares began trading on the NASDAQ under the ticker symbol WB. The first trade came in at $16.27 but closed at $20.24. That marks a 20 percent bump from its IPO price of $17 a share.
While a twenty percent jump is good, it’s a world away from the 73 percent pop in price for Twitter’s IPO which happened less than six months ago. It is a comparison because Weibo is often called the Chinese version of Twitter. Is Weibo’s underwhelming IPO a company problem or is it telling us something about the greater market?
Follow Karina Huber on Twitter @kkat31
Weibo Shares Jump in Market DebutAfter getting frozen out of the U.S. market a few years ago, Chinese companies are scrambling to list in the U.S. More than a dozen Chinese companies have filed for an IPO so far. Micro-blogging giant Weibo began trading in the U.S. Thursday but things didn’t go quite as planned. Karina Huber reports.
Chinese social media company Weibo Corp.’s shares soared in their U.S. market debut Thursday.
Weibo was launched four years ago by Chinese online media company Sina Corp. Weibo provides a Twitter-like service that allows users to post a feed of up to 140 Chinese characters to share with others. Users can also attach multimedia, such as photos and videos, to their posts.
The company has 61.4 million average daily active users, according to its filing with the U.S. Securities and Exchange Commission.
Weibo raised $285.6 million, pricing 16.8 million American depository shares at $17 each. That’s a smaller amount than anticipated. Weibo had projected an offering of 20 million shares priced between $17 and $19.
Its shares rose 19 percent to close at $20.24 Thursday.
Weibo plans to use the IPO’s proceeds to repay loans to its majority owner Sina, and invest the rest in its business. Alibaba Group invested in the company in 2013 and is expected to hold a 32 percent stake in the company following the offering.
Alibaba, a Chinese e-commerce giant, has also said it plans to go public on a U.S. stock exchange.
U.S. shares of the Weibo, which is incorporated in the Cayman Islands but conducts business in China, are trading on the Nasdaq under the symbol “WB.”
Weibo’s revenue almost tripled to 188.3 million in 2013 from a year earlier while its net loss narrowed to 38.1 million from 102.5 million.
Report compiled with information from Xinhua and The Associated Press.