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Chinese social media giant Weibo opened at $32.85 in Hong Kong debut amid wild ride for China’s tech sector.
Chinese microblogging website Sina Weibo opened 6% lower on its Hong Kong trading debut on Wednesday. The company’s shares kicked off at 256.20 Hong Kong dollars ($32.85) per unit but dropped down to 253.20 Hong Kong dollars at a point during the session. Both prices are lower than the initial offer price of 272.80 Hong Kong dollars ($34.98).
The Hong Kong outing marks the secondary listing for Weibo, which generated close to $385 million. The Chinese social media giant’s main and primary listing is on the NASDAQ in the US. Here its stock surged by 4.69% during the overnight session.
Several tech-inclined Chinese companies have recently-established Hong Kong listings. A few notables are search engine giant Baidu, e-commerce giants Alibaba and JD.com, and gaming firm NetEase.
Weibo is one of the most recent Chinese internet firms to do a secondary listing in Hong Kong. This comes on the heels of ride-hailing giant Didi (NYSE: DIDI) announcing last week that it intended to delist from the New York Stock Exchange. The Beijing-headquartered company said it was going to list in Hong Kong instead.
According to reports, part of Didi’s decision to exit the US was the displeasure shown by Chinese regulators over the platform listing there in the first place. Authorities felt that Didi made this move in the face of unresolved cybersecurity issues and asked the Chinese executives to delist. In addition, regulators also cited data leakage concerns as another factor influencing that development.
Beijing vs China’s Tech Sector
Much of China’s tech sector has been caught up in sweeping regulatory activities from the government within the past year. Beijing ruled that many huge tech corporations were not playing fair and thus cracked down heavily on them. This has seen the likes of Alibaba, Tencent, and JD.com face increased government scrutiny and fine impositions.
The Chinese government enacted some new legislative rules within the tech sector that ranged from anti-monopoly to data security. This move had an adverse effect on investors and big players. Furthermore, this consequently resulted in the loss of billions of dollars among China’s tech heavyweights.
Weibo launched in 2009 as a microblogging platform with similar functionality to American social media giant Twitter. In fact, it has earned a colloquial reputation as ‘China’s Twitter.’ However, compared to Twitter, Weibo has a user base of more than 570 million. In addition, it is the second-biggest social media platform in the region after Tencent’s WeChat.
Weibo also combines some elements from Facebook (now Meta Platforms) and Medium. The platform rose to prominence after the Chinese government banned the usage of Twitter and Facebook within its borders. Ironically, Weibo is also one of the 223 media platforms banned in India. Other notable applications proscribed in the South Asian region include Chinese video-focused platform TikTok, PubG, and ShareIT.