Weibo Corp. raises 286 million dollars in IPO, sells fewer shares than initially expected

People with knowledge of the matter, who asked not to be named, reported that Weibo Corp., which is also known as the Chinese equivalent of Twitter, managed to raise 286 million dollars in its initial public offering in the U.S. The figures did not meet the analysts expectations due to a reduced offering size. The shares of Weibo Corp. will be listed on the Nasdaq Stock Market under the abbreviation WB.

According to the people familiar with the details of the companys Initial Public Offering, Weibo managed to sell 16.8 million Class A American depositary shares at the price of 17 dollars apiece. This is lower than the initially expected 20 million shares. Each of the shares had been offered for 17 to 19 dollars.

The senior research analyst at ICBC International Research Ltd You Na commented the results for Bloomberg: “Investors have a lot of concerns about Weibo especially now that it is facing a competitive landscape. The market is also in a relative weak state.”

One of the Weibo Corp. spokesmen did not immediately answer a call when asked to comment on the companys IPO results.

Weibo Corp. is valued at about 3.4 billion dollars at the IPO price. The company has reported to be growing but posted a net loss for 2013. Weibo was founded in 2009 and since then had reached 144 million monthly active users. The company offers a microblogging service that is pretty much similar to the one offered by Twitter Inc. The company provides its users with the opportunity to send brief public messages to their followers, who on the other hand, are able to comment or repost them.

As reported by the Financial Times, the Chief Executive Officer of Triton Research Mr. Rett Wallace commented: “This deal is pricing Weibo at about a quarter of Twitter’s market value at its IPO price and less than a seventh of its trading value today. So the multiple differential is huge.”

The revenue of Weivo Corp. was reported to have reached 188 million dollars in 2013. Last year, the company also managed to shrink its net loss from 102 to 38 million dollars. The major part of Weibos revenue is generated from advertising, which is the reason why the company considers an eventual partnership with Alibaba and linking the companys advertising to e-commerce transactions. Currently, Alibaba is one of the largest investors in Weibo. According to the offering prospectus, Alibaba will hold about one third in the Chinese microblogging company after the completion of the IPO.