Wed, Feb 26, 2014 - Page 15 News List

Sina reportedly planning New York IPO for Weibo

AP, HONG KONG

Chinese Internet company Sina Corp (新浪) plans to spin off its microblogging service, Sina Weibo (微博), in a US initial public offering (IPO) to raise UD$500 million, a person familiar with the deal said yesterday.

The person, who requested anonymity because they are not authorized to speak publicly about the plan, said investment banks Goldman Sachs and Credit Suisse have been hired to manage the initial public offering in New York.

The share sale, which has not been officially announced, is expected to be carried out in the second quarter.

Sina’s plan was first reported by the Financial Times on Monday and comes as other Chinese Internet heavyweights are also preparing share sales.

Online retailer JD.com (京東) filed for a US stock listing last month, while Alibaba Group (阿里巴巴), China’s largest e-commerce company, is planning an IPO that is widely expected to happen this year and could value the company at more than US$100 billion.

Alibaba bought an 18 percent stake in Sina Weibo for US$586 million in April last year.

Chinese microblogs have enjoyed explosive growth as users have taken to social media to share information in a country where the Web is strictly regulated. Yet numbers have been crimped recently by tighter government controls on what can be posted and reposted.

Chinese microblogs had 281 million users at the end of last year, down 9 percent from the previous year, according to the China Internet Network Information Center.

The decline comes as Web users in the country shift to smartphone-based instant messaging services such as Tencent’s (騰訊) WeChat, which has surged in popularity since 2012, threatening Sina Weibo’s dominance in information sharing. WeChat and similar apps are increasingly incorporating social media functions that resemble microblog features.

Sina on Monday reported that fourth-quarter earnings jumped 18-fold to US$44.5 million, as Sina Weibo turned an operating profit for the first time thanks to rising revenue from advertising, games and VIP membership fees.

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