On Friday Weibo registered to sell 20 million American Depositary Shares (ADSes) in a price range of $17 to $19 a share, or a maximum of $437 million. One ADS is equal to one Class A ordinary share. Goldman Sachs and Credit Suisse are lead underwriters for the IPO. The underwriters have a 30-day option on an additional 3 million ADSes.
The majority owner of Weibo is Sina Corp. (NASDAQ: SINA), which will continue to hold about 57% of Weibo’s outstanding ordinary shares and 80% of the Class B shares following the IPO. The share class values are the same, but Class B shares get 3 votes per share compared with one vote per share for Class A shares.
Despite claims of 129 million monthly active users at the end of December, growth in user numbers has slowed down to a record low according to the Financial Times. The company has also had a number of run-ins with the government for posts by some high-profile users who have criticized China’s ruling party.
Alibaba, which has also filed for a U.S. IPO, currently owns an 18% stake in the company and has said that it will exercise its option to boost its stake to 30% and appoint one member to Weibo’s board of directors. There is some speculation that Alibaba may move to acquire Weibo after both IPO’s are completed.
Yahoo! Inc. (NASDAQ: YHOO), which owns a 24% stake in Alibaba, has a dog in the hunt as well. The company’s stake in Alibaba could be worth $36 billion if Alibaba’s IPO goes out at a valuation of $150 billion. Valuation estimates for Alibaba have been as high as $200 billion, but these have come down recently for the same reasons that Weibo’s sights have been lowered.
Sponsored: Attention Savvy Investors: Speak to 3 Financial Experts – FREE
Ever wanted an extra set of eyes on an investment you’re considering? Now you can speak with up to 3 financial experts in your area for FREE. By simply
clicking here you can begin to match with financial professionals who can help guide you through the financial decisions you’re making. And the best part? The first conversation with them is free.
Click here to match with up to 3 financial pros who would be excited to help you make financial decisions.
Thank you for reading! Have some feedback for us?
Contact the 24/7 Wall St. editorial team.