Weibo, the Chinese microblogging company and majority-owned by Sina Corp (NASDAQ:SINA) and Alibaba Group Holding Limited priced its U.S. initial public offering (IPO) for $17 per American Depositary Share (ADS), the lowest of its proposed price range, according to Bloomberg based on information obtained for people familiar with the matter.
According to the report, Weibo raised $285.6 million from selling 16.8 million ADS (Class A). The Chinese microblogging company will start trading at Nasdaq under the ticker symbol “WB” on Thursday. It is one of the seven Chinese technology companies seeking to raise capital for a total of $2.8 billion in the United States through public offering this year.
Some analysts issued a warning signal on Weibo given the existing volatility of the U.S. stock markets and increasing competition from rivals such as WeChat. Over the past few weeks, the markets suffered some huge losses due to investors’ selloff of technology stocks particularly the biggest gainers in the bull market such as Tesla Motors Inc (NASDAQ:TSLA), Netflix (NASDAQ:NFLX), and Twitter Inc (NYSE:TWTR).
“Investors have a lot of concerns about Weibo especially now that it is facing a competitive landscape. “The market is also in a relative weak state,” said You Na, a senior research analyst at ICBC International Research Ltd. in Hong Kong.
On the other hand, Morningstar analyst Yue Yao noted some signs that threaten Weibo as Chinese internet users are rapidly moving away from desktops towards mobile devices. According to Yao, “We have continuously witnessed the usage of Sina Weibo on mobile devices being constrained by Tencent’s WeChat.”
A day prior to its first day of trading, Weibo disclosed its latest financial performance showing that its net losses for the first quarter increased to $47.4 million, more than twice its $19.2 million net losses in the same period a year ago. Its revenue also more than doubled from $25.9 million to $67.5 million.
Weibo claimed that it has 129.1 million monthly active users (MAUs) and 61.4 million daily actives users (DAUs) as of December 31, 2013.
Goldman Sachs (Asia) LLC and Credit Suisse serve as lead underwriters for Weibo’s IPO.
