The Wall Street Journal reports,"China's Weibo social-media service has transformed discourse in the world's second-largest economy, giving a generation of young Chinese a way to reach millions outside traditional government-controlled media channels.
Now its owner hopes to take it public in the U.S.—at the same time that Weibo faces its biggest challenge to its four-year reign as China's top online forum".
Sina Corp. is aiming to raise roughly $500 million in a second-quarter U.S. initial public offering of the Twitter -like service, according to two people with direct knowledge of the deal. Sina—which is already listed in the U.S.—has hired Credit Suisse AG and Goldman Sachs Group Inc. to handle the U.S. listing, one person said. The Financial Times reported the Weibo IPO plans earlier Monday.
Along with the U.S. listing, Weibo could get a further boost from Alibaba Group Holding Ltd., the Chinese e-commerce company. People familiar with the plans of the companies told The Wall Street Journal that Alibaba is likely to increase its stake in Weibo to 30% from 18% if an IPO takes place. In April, Alibaba bought the 18% stake in Weibo from Sina for $586 million as it moved to broaden its mobile offerings.
Details of a Weibo IPO weren't clear, but the value of Alibaba's purchase suggests it would represent a minority stake in the business.
Alibaba's interest in potentially raising its stake in Weibo comes as it also considers its own IPO, in either Hong Kong or the U.S.
Alibaba's move to invest in Weibo last year was part of a brewing competition among Chinese Internet giants to capture the increasing number of Chinese tapping the Internet through mobile phones and gadgets.
Its main competition is Tencent Holdings Ltd. , which owns the popular WeChat instant-messaging app and poses an increasing threat to Weibo. Sina has said that online Chinese are spending more time on WeChat at the expense of Weibo. Tencent declined to comment.
Weibo faces pressure on the political front, too. The Chinese government last year cracked down on some of Weibo's biggest personalities and launched what it called an antirumor campaign, which raised concerns among analysts that the service's popularity would erode. Chinese authorities arrested a high-profile commentator on charges of soliciting a prostitute, warned others and expanded criminal laws that make it easier to prosecute people for their online activity.
