I.P.O. Planned for Chinese Microblogging Service
By DAVID BARBOZA
DealBook
New York Times
February 24, 2014, 8:04 am
SHANGHAI — The Sina Corporation, one of China’s biggest Internet portals, is preparing an initial public offering in the United States for Weibo, its Twitter-like microblogging service, according to people close to the matter.
The offering, which has not been formally announced, could raise up to $500 million later this year. Goldman Sachs and Credit Suisse have been selected to underwrite the offering, according to the people close to the matter.
Goldman Sachs and Credit Suisse declined to comment on Monday, and a Sina representative could not be reached for comment.
Sina’s push to list one of its most popular units comes at a time when Chinese Internet companies are on a manic acquisition spree.
Over the last two years, China’s big three Internet companies — Alibaba, Baidu and Tencent — have spent several billion dollars acquiring Chinese start-ups and international online game companies. They have been buoyed by huge stockpiles of cash and soaring stock prices.
Later this year, two of China’s biggest e-commerce companies — Alibaba and Jingdong.com — are expected to go public in the United States. The Alibaba offering, which has not been finalized, could be the biggest stock offering in history, valuing the company at more than $100 billion.
Sina, which is an Internet portal much like Yahoo, saw its fortunes rise several years ago when microblogging services became popular in China. Sina’s Weibo led the way, followed by Tencent’s own microblogging service.
Last year, Alibaba paid $586 million to buy an 18 percent stake in Sina Weibo, valuing the company at $3.3 billion. The other 71 percent stake is held by Sina, which is based in Beijing.
Some analysts now project that Sina’s Weibo unit could be worth $5 billion, even more than its parent, which is listed on Nasdaq.
The popularity of Sina’s microblogging service has been undermined by government censorship and the spectacular rise of Tencent’s instant-messaging application, WeChat, or Weixin, in Chinese. The WeChat service bears some resemblance to the American start-up WhatsApp, which Facebook just agreed to acquire for up to $19 billion.
Chinese Internet companies are goliaths in their own right. Alibaba, which is privately owned, is now valued at about $130 billion and Hong Kong-listed Tencent is trading at close to $130 billion. The market value of Nasdaq-listed Baidu is $60 billion.
Sina’s planned I.P.O. for Weibo was reported on Monday by The Financial Times.
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