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Weibo Corp., the Chinese microblogging service owned by Sina Corp., surged 19% in its first day of trading after pricing its initial public offering at the low end of the marketed range.
The shares climbed $3.24 to $21.24 as in New York, after they were priced at $17 each. Weibo, which also counts Alibaba Group Holdings among its backers, raised $285.6 million in the IPO, after offering the shares for $17 to $19 apiece.
Weibo's IPO was set against the backdrop of tumbling stocks. Since the company publicly filed for its IPO on March 14, U.S. peer Twitter dropped more than 14% through yesterday amid a broad decline in technology stocks while Sina fell 18 percent. Weibo joins seven other Chinese Internet companies that have filed to raise a total of $2.8 billion in New York this year.
"Investors have a lot of concerns about Weibo, especially now that it is facing a competitive landscape," said You Na, a senior research analyst at ICBC International Research Ltd. in Hong Kong. "The market is also in a relative weak state."
The tally of U.S. offerings by Chinese companies this year doesn't include Alibaba, which is preparing to go public and which analysts estimate could be the biggest IPO in the U.S. in at least two years.
Weibo operates a Twitter-like service that derived 79% of its $188.3 million in revenue from advertising and marketing last year, filings show. That amounted to about $1.46 in sales for each of its 129.1 million active monthly users. Weibo is unprofitable, posting losses for the past three years.
Alibaba agreed a year ago to buy a 19% stake in Weibo for $586 million, and plans to exercise an option to raise that stake to 32%, according to a filing. Weibo plans to use about $250 million of the proceeds from the IPO to repay loans owed to Sina.
Goldman Sachs Group and Credit Suisse managed the offering. The shares are listed on the Nasdaq Stock Market under the symbol WB.
-- Bloomberg News --