Weibo, the microblogging service formed by the Sina Corporation, has been called the Twitter of China. But the company will carry a value well below that of its American counterpart when it begins trading on the public markets.
Weibo priced its initial public offering at $17 per American depositary share on Wednesday, at the bottom of its expected range. At that level, the social network operator will have raised $285 million, and would be valued at $3.6 billion. By contrast, Twitter ended trading on Wednesday worth $26 billion.
For some time, Weibo (WAY-bwoh) had generated a fair amount of investor interest. It is the biggest of China’s microblogging services, with Alibaba Group, the online commerce titan, a major shareholder. And it is the latest Chinese company to seek a listing in an American market. Alibaba itself is preparing what may be one of the biggest I.P.O.’s in history, while other big Chinese online players like JD.com are in the process of going public.
But Weibo’s I.P.O. prospectus revealed that the company’s growth isn’t quite as impressive as analysts and investors had expected.
While its revenue more than doubled last year, to $188.3 million, and its loss shrank to $38.1 million, according to the offering prospectus, its user base is far less than Twitter’s. Weibo claimed 143.8 million monthly active users as of March 31, compared with the American company’s 241 million.
Its performance pales in comparison with Alibaba’s, which disclosed a 66 percent jump in fourth-quarter revenue and a more than doubling of profit on Tuesday.
It isn’t just financial concerns that may weigh down Weibo’s prospects. Among the risk factors in its prospectus is the possibility of government censorship harming the company’s business.
The microblogging site is also attempting to come to market at a time when both I.P.O.’s and technology stocks have suffered from growing investor skepticism. One of the most highly awaited market debutants this week, the investment bank Moelis & Company, chose to price its offering a dollar below its expected price range to ensure that its stock traded well.
Weibo’s offering is being led by Goldman Sachs and Credit Suisse.
