Weibo, the Chinese micro-blogging company, will commence its initial public offering (IPO) in the United States tomorrow. It will be trading its stock on the Nasdaq Select Market under the ticker symbol “WB.”
Based on its latest regulatory filing with the Securities and Exchange Commission (SEC), Weibo aims to raise $437 million during its IPO. The company will be offering 20 million American Depository Shares (ADS) and its proposed offering price is between $17 and $19 per ADS.
The underwriters have a 30-day option to purchase an additional 3 million ADS shares at the IPO price less the underwriting discount from Weibo.
Weibo’s latest quarterly financial results
Weibo released its latest financial performance prior to its first day of trading tomorrow. The Chinese microblogging company reported $47.4 million net losses during the first quarter, which is more than double its net losses of $19.2 million in the same period a year ago.
The company recorded $67.5 million revenues for the quarter, which is significantly higher compared with its $25.9 million revenues in the same period last year. Weibo’s adjusted EBITDA was $0.6 million compared with its negative $11.5 million adjusted EBITA last year.
Monthly active users (MAUs)
Weibo claimed that it has 129.1 million monthly active users and it has a large user base in China and among Chinese communities in over 190 countries around the world. According to the company its average daily active users (DAUs) were 61.4 million as of December 31, 2013.
Last month, Weibo said it had 143.8 million MAUs and 66.6 million DAUs, up from 107.3 million MAUs and 48.6 million DAUs in March last year.
Warning sign
Morningstar analyst Yue Yao warned that there are threatening signs for Weibo because of the fact that Chinese internet users are rapidly moving away from desktops towards mobile devices. Yao said, “We have continuously witnessed the usage of Sina Weibo on mobile devices being constrained by Tencent’s WeChat.”
Alibaba investment
Weibo is a majority owned subsidiary of SINA Corp (NASDAQ:SINA), which owns more than 50% of its total outstanding voting securities. Alibaba through its wholly owned subsidiary Ali WB Investment Holding Limited acquired a 18% stake in Weibo after investing $585.8 million. Last month, Ali WB informed Weibo that it will exercise its option to increase its stake in the company to 32% after its IPO.
