Sun, Apr 06, 2014 - Page 13 News List

Weibo seeks to raise US$340m in US market debut


The microblogging service Weibo (微博) — often described as China’s version of Twitter — intends to raise at least US$340 million in its US stock offering, an updated filing showed on Friday.

The updated plan suggests a tighter relationship with Chinese e-commerce giant Alibaba (阿里巴巴), as Weibo spins off from Internet firm Sina (新浪).

The Weibo filing scales back the amount indicated last month of up to US$500 million.

The initial public offering (IPO) will include 20 million shares, with an option for three million more if there is enough demand.

The price per share was set at a range of US$17 to US$19 in the updated filing with the US Securities and Exchange Commission.

The shares would trade on the NASDAQ under “WB.” The debut’s date was not announced.

The document said a unit of Alibaba had agreed to buy three million shares in the IPO and had an option to increase its stake up to 30 percent of the total capital of the company, up from the current level of 18 percent.

The Alibaba unit Ali WB could obtain up to 32 percent of the ordinary shares, which would give it 15 percent of the voting power. However, Sina would still hold 56.9 percent of the capital after the IPO, down from 79.9 percent.

Weibo was launched in August 2009 with a business model reminiscent of that of Twitter — which is banned in China.

The company 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 last year.

Meanwhile, investors sent shares of GrubHub Inc up more than 30 percent on Friday in an IPO that gave the online food-ordering service a market capitalization of nearly US$2.7 billion.

GrubHub is one of four companies to go public on Friday in what has been a very hot IPO market, especially for businesses in the cloud software and biotech industries.

GrubHub raised US$192.5 million after pricing more than 7.4 million shares at US$26 each. That was better than the company’s previously expected range of US$23 to US$25 per share. The stock surged US$8, or 31 percent, to close at US$34, and hit a high of US$40.80 earlier in the session.

“Investors are looking for growth in a slow-growth economy,” Renaissance Capital principal Kathleen Smith said.

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