Boston, MA 02/25/2014 (wallstreetpr) – SINA Corp (NASDAQ:SINA) continues to trade under pressure after the China’s media giant reported fourth quarter results in line with the consensus, but did not beat it with a wide margin in its old usual way. Moreover, the street is also reacting to the buzz that the company will launch WeiboIPO on the U.S. Stock Exchange.
More On The Results
In the fourth quarter, SINA Corp (NASDAQ:SINA)’s revenue jumped 43%, mostly contributed by its Weibo unit, which is a Twitter like messaging service in China. Weibo posted twofold growth in advertising sales revenue in spite of tough competition from its rivals like Tencent Holdings Ltd’sWeChat. The ad revenue for Weibo accounted for $56 million in the last three months of the year 2013, which translates into a growth rate of 163%. While its non-ad revenue sourced from data licensing, membership fees and games, grew by 114% to $15.4 million.
SINA Corp (NASDAQ:SINA)’s non-GAAP revenue stood marginally ahead of the market consensus of $192.2 million to $192.3 million. Its non-GAAP net income doubled to $0.47 per share or $33 million during the quarter, higher than the market consensus by $0.46. For the first quarter of 2014, Sina Corp has projected the revenues in line with the market expectation, which is to fall in the range of $162-$167 million.
Weibo IPO In Pipeline
According to an undisclosed source familiar with the matter, SINA Corp (NASDAQ:SINA) is almost on completion of its plan to spin-off its Weibo microblog service and to float it as an initial public offering on the New York Stock Exchange, to raise $500 million capital. The company is believed to have hired Goldman Sachs and Credit Suisse as the book running managers for the slated issue. Whilst Sina is keeping mum over the proposed IPO, there are reports that it is scheduled to open in the second quarter of the year.
A report from The Wall Street Journal highlights that the China’s internet giant, Alibaba, which itself is about to launch an IPO, might increase its stake in Weibo to 30% in an event if it goes public. Alibaba had acquired 18% stake in Weibo last year for $568 million. According to the analyst at Barclays, SINA Corp (NASDAQ:SINA)’s current 71% stake in Weibo is worth $4.1 billion. Lately, Weibo seems challenged by the enormous growth reported by its rival WeChat, as the Chinese population shift to more subtly regulated mobile internet chat service.
