Weibo Shares Surge in Stock Market Debut
Shares of Weibo Corp., the Chinese social media company often compared to Twitter, jumped as much as 44 percent during its first day of trading on Thursday, following the company's disappointing IPO pricing on Wednesday.
Weibo ended its first day at $20.24, valuing the company at more than $4 billion. It raised $286 million in its IPO, short of expectations as the share price of $17 was at the soft end of its projected $17-$19 range. And the company sold 16.8 million shares -- significantly less than its 20-million target.
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The stock opened on the Nasdaq on Thursday below the IPO price, at $16.27, but soon took off, hitting a high of $24.48, up 44 percent, and landing 19 percent up, at $20.24.
Chinese tech giant Sina launched Weibo in 2009 and it had grown its active user base to 144 million as of March. Amid China's tightly controlled media climate, the service has served as a digital public square of sorts over the years, with users flocking to it for everything from following and interacting with celebrities, to sharing information surrounding political scandals and general issues of public concern that haven't been transparently addressed by the state-controlled press.
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Weibo has faced challenges in recent years, however, including increased competition from mobile-based rivals, such as Tencent's WeChat, and increased government pressure and scrutiny -- due to a slew of embarrassing political scandals that were broken by civilian journalists on the service.
The site is still popular with many figures in the Chinese entertainment industry. Writer-director Guo Jingming, famous for his Tiny Times series of books and film franchise, has over 31.5 million Weibo followers. Actress and style icon Fan BingBing has some 7.5 million followers, while influential art house director Jia Zhangke has 13.5 million.