Sina Corp. (NASDAQ: SINA), one of China’s largest Internet companies and the majority owner of Weibo Corp. (NASDAQ: WB), has had the two of its publication and distribution licenses revoked by the government in the latest crackdown on Internet pornography. The government’s National Office Against Pornographic and Illegal Publications found 20 articles and four videos on the company’s portal site that were “confirmed to have contained lewd and pornographic content,” according to China’s Xinhua News Agency.
Another government agency, the State Administration of Press, Publication, Radio, Film and Television, used its authority to revoke Sina’s licenses and to impose a “large number of fines.” Xinhua also reports that people suspected of criminal offenses “have been transferred to police organs for further investigation.” That sounds unpleasant.
Weibo, which held its initial public offering just last week, has also caught the attention of Chinese authorities who have been waging a campaign to stop what they view as rumors and personal attacks spread through social media sites. According to The Wall Street Journal, 110 websites and 3,300 user accounts have been shut down in the latest crackdown, which officials have named “Cleaning the Web 2014.”
Sina got into hot water with authorities last year for publishing content that was officially banned, and officials said that the company has flouted its punishment, has not learned its lesson and has turned a “cold shoulder on social responsibility.” Apparently this latest round of chastisement has gotten the attention of Sina’s management. The company has promised to “obey the punishment without passing the buck.”
Sina’s shares fell more than 3% on Thursday and closed at $51.64 in a 52-week range of $48.41 to $92.83.
Weibo shares slipped 4.5% to $20.44, in a post-IPO range of $16.26 to $24.48.
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