IPO Stock Watch: Weibo Gains From Microblogging Memo
By BRIAN DEAGON, INVESTOR'S BUSINESS DAILY
Posted 09/11/2014 06:03 PM ET
Weibo (NASDAQ: WB) stock surged to a new high Thursday amid reports that China's State Internet Information Office issued a memo requesting government offices use microblogging services to communicate with the public.
Weibo runs a Chinese-language microblogging social network, similar to Twitter (NYSE: TWTR), with 157 million monthly active users.
Weibo rose 13.3% to 24.34, a new closing high, in the stock market today. Weibo held its initial public offering on April 17, priced at 17.
According to news reports, China's Internet Information Office encouraged government agencies above the county level to open public messaging accounts in fields such as education, public security and civil affairs.
Weibo's stock move also comes as Alibaba Group is in the midst of an IPO roadshow. The IPO is expected to price next Thursday. Alibaba owns a 30% stake in Weibo. It also has strategic alliances with other leading China Internet companies such as Youku Tudou (NYSE: YOKU) and AutoNavi.
Weibo was spun off by Chinese Web portal Sina (NASDAQ: SINA), which reduced its stake in the company to 56% from 78% but retained about 80% of voting power. Sina stock rose 4.4% to 48.01 Thursday.
Alibaba competes with Tencent Holdings (OTCPK: TCEHY), China's largest Internet company. Tencent dominates social media and messaging, while Alibaba reigns over e-commerce. Both are engaged in an intense effort to corral an estimated 600 million online users in China. Alibaba has aggressively sought alliances to expand its reach into social gaming and mobile.
Follow Brian Deagon on Twitter: @IBD_BDeagon.
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