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About 44% of Weibo’s stake belongs to the Chinese technology company Sina Corporation. In addition, Alibaba Group Holdings is the second-largest shareholder, owning around 29.6% stake in the company.
Chinese microblogging website Weibo (NASDAQ: WB) has received the Hong Kong Stock Exchange approval for its secondary listing. Now, Weibo will sell its shares in China, alongside its initial listing in New York. According to the filings, Weibo did not indicate the amount it is looking to generate from the secondary listing. Weibo’s consideration for a secondary listing came amid the increased tech and trade tension in the US. As a result of the ongoing happenings, Chinese giants like Alibaba (NYSE: BABA) and JD.com have sought secondary listings in Hong Kong.
Weibo Seeks Secondary Listing in Hong Kong
On the 18th of November, Weibo submitted its prospectus for a secondary listing to the Hong Kong Stock Exchange. This comes after China’s EV maker Li Auto listed in New York back in August. Data compiled by Refinitiv showed that the automaker generated $1.7 billion. Upon a successful secondary listing, Weibo will use the fresh funds to expand its content offering, and at the same time, advance its technology.
In the filing, the microblogging company wrote:
“We help the content creators on our platform to engage and interact with their followers and build up their social assets to create social value and monetisation opportunities.”
Although there is no information on the expected amount from the public offering, sources told Reuters that the deal would be worth up to $700 million. In addition, two reliable sources added that Weibo is yet to determine the final size of the coming IPO. The joint sponsors on the deal include Credit Suisse, Goldman Sachs, Citic Securities, and CICC.
Notably, about 44.4% of Weibo’s stake belongs to the Chinese technology company Sina Corporation. In addition, Alibaba Group Holdings is the second-largest shareholder, owning around 29.6% stake in the company.
Since January, several Chinese companies listed in the US have moved towards secondary listing in Hong Kong. This is as a result of increased scrutiny from the US Securities and Exchange Commission (SEC), which could affect the firms’ offerings. The SEC has established a framework that could lead to the delisting of some US-listed Chinese companies. The framework will be used to confirm the Chinese companies that have refused to wholly allow the US authorities to audit them.
Weibo Generates Revenue from Advertising and Marketing Services
As of June, Weibo’s average daily active users were up to 246 million, while its monthly active users were 566 million. The majority of its revenue comes from users who purchase advertising and marketing services. These customers account for 86% of the company’s total revenue for the first six months of the year. Also, 88% of the total revenue Weibo recorded in 2020 was from the customers who purchased advertising and marketing services.
The Nasdaq-listed Chinese company’s stock is currently at a pre-market trading price of $42.35%. The trading price is a 1.41% gain from its previous close of $41.76%. Except for a 1.88% increase since the year began, WB has been on a steady decline.