Chinese Social Media Giant Sina Weibo Seeks U.S. Stock Market Listing

Sina CEO Charles Chao

The Twitter-like company, popular with local celebrities and government critics, is looking to raise around $500 million from the listing, which would give it a valuation of $8 billion.

Chinese internet giant Sina plans to spin off its Twitter-style microblog unit, Weibo, in a New York initial public offering “relatively soon,” the official state news agency Xinhua reports.

Sina Weibo is looking to raise around $500 million from the listing, and it is due to take place in the first half of the year, Xinhua said, citing anonymous sources.

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Sina Weibo is the most popular microblogging outlet in China with 61.4 million daily users. It's the preferred service for both local celebrities and government critics, along with legions of ordinary users. It is 18-percent owned by the giant online e-commerce company Alibaba.

The listing would reportedly give Sina Weibo an $8 billion valuation, a huge premium on its current market capitalization of $5 billion.

News of a planned listing comes soon after Facebook’s $19 billion acquisition of messaging service WhatsApp and shows the growing importance of the mobile space in the global tech industry.

Weibo microblogs -- which are operated by numerous companies in China, with Sina’s the biggest -- allow users to send short messages of 140 characters or fewer to their followers. In Chinese, a character is a word or at least half a word, so this can represent a pretty long message.

Sina Weibo’s popularity has come under pressure from Tencent’s WhatsApp-like messaging application WeChat, known as Weixin in China. Active users of microblogs in China fell by a tenth between 2012 and 2013, according to a report by the China Internet Network Information Center.

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At the same time, Weibo's daily active users increased from 60.2 million at the end of September 2013 to 61.4 million by the end of the year. The number was 46.2 million at the end of 2012.

Weibo users were posting 130 million messages a day by the end of October 2013.

The news came shortly after Sina Corp. announced its financial results for the fourth quarter and the full 2013 year, which showed sold growth.

For the fourth quarter, Weibo's total revenues reached $71.4 million, up 151 percent over last year and 33.7 percent quarter over quarter. The group made an operating profit of $3 million for the first time since it was launched in 2009.

Advertising revenues grew 163 percent year over year, or 28 percent quarter over quarter, to $56 million.

Cao Guowei, chairman and CEO of parent group Sina, which is already listed in the U.S., said robust growth of Weibo was the main cause for the whole of Sina to achieve strong revenues and profits in the fourth quarter, and he said that to improve user experience, Weibo plans to make its platform more multimedia-based. News, music and video will feature more prominently in Weibo, he said.

Reuters reported that Sina has hired Credit Suisse and Goldman Sachs to handle the U.S. offering.