Sun, Mar 16, 2014 - Page 13 News List

Sina Weibo files for public offering

SEARCHING FOR PROFITS:Although its revenue tripled last year from a year earlier, the Web site has continually failed to make a profit, but it plans to turn that around

AFP, NEW YORK

Sina Weibo Corp (新浪微博), the Chinese microblogging service often compared with Twitter Inc, filed on Friday for a US stock offering seeking to raise US$500 million.

The move will allow the popular Chinese-language social network to spin off from the Internet giant Sina Corp (新浪公司), according to documents filed with the US Securities and Exchange Commission.

The filing said Sina Weibo had 129.1 million monthly active users in December last year and 61.4 million average daily active users.

The company did not indicate whether Sina Weibo would file its IPO on the NASDAQ or New York Stock Exchange.

The lead underwriters will be Goldman Sachs Asia and Credit Suisse.

“A microcosm of Chinese society, Weibo has attracted a wide range of users, including ordinary people, celebrities and other public figures, as well as organizations such as media outlets, businesses, government agencies and charities,” the commission said in a filing.

“Weibo has become a cultural phenomenon in China,” it said.

“Weibo allows people to be heard publicly and exposed to the rich ideas, cultures and experiences of the broader world,” it added.

“Media outlets use Weibo as a source of news and a distribution channel for their headline news. [Chinese] government agencies and officials use Weibo as an official communication channel for disseminating timely information and gauging public opinion to improve public services,” according to the filing.

The filing said Sina Weibo’s IPO will be part of a “carve-out from Sina,” but that Sina would “continue to provide us with certain support services” after it becomes independent.

“We will use approximately US$250 million of the net proceeds we receive from this offering to repay loans we owe to Sina,” the document read.

“We intend to use the remainder to invest in technology, infrastructure and product development, to expand sales and marketing efforts, and for working capital and other general corporate purposes,” it added.

Sina Weibo was launched in August 2009 with a business model reminiscent of that of Twitter.

Sina Weibo reported revenues for last year of US$188 million, triple the level of 2012, but has continually lost money, like its US counterpart, with accumulated losses of US$274.9 million as of Dec. 31.

However, Sina Weibo said it would work to increase the number of users and monetization as it strives for profitability.

For a comparison, Twitter’s high-flying Wall Street debut in November last year drew attention to the growing power of social media, but it also raised concerns about a potential bubble in the sector.

The US microblogging service’s shares soared after debuting at US$26 in the initial public offering, but dropped the following day to slightly more than US$40.

At the close of trading on the New York Stock Exchange, Twitter shares stood at US$51.92.

Separately, US media reported that a huge stock offering planned by Chinese e-commerce giant Alibaba (阿里巴巴) is being prepared for New York.

The Wall Street Journal and the New York Times, citing unnamed sources, said Alibaba chose New York after ruling out Hong Kong and London for its initial public offering.

The reports did not say whether the IPO would be on the NASDAQ or the New York Stock Exchange.

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