Weibo, Leju go pub­lic in NYC

Pric­ing at lower end wor­ried some, but both didn’t fail to per­form well

China Daily (Canada) - - FRONT PAGE - By MICHAEL BAR­RIS in New York michael­bar­ris@chi­nadai­lyusa. com

On a day when two ini­tial pub­lic of­fer­ings on New York stock ex­changes put China in the US fi­nan­cial com­mu­nity spot­light, the stars didn’t dis­ap­point.

Weibo Corp, the Chi­nese mi­cro blog­ging ser­vice owned by Sina Corp and Alibaba Group Hold­ings Ltd, surged 19 per­cent above its of­fer­ing price in its first trad­ing on the Nas­daq Stock Mar­ket af­ter rais­ing $285.6 mil­lion. Leju Hold­ings Ltd, which op­er­ates real es­tate in­for­ma­tion and e-com­merce web­sites in China, climbed 18.5 per­cent on the New York Stock Ex­change af­ter rais­ing $100 mil­lion.

Weibo’s IPO is re­garded as a barom­e­ter for the ex­pected IPO of e-com­merce gi­ant and 19 per­cent Weibo share­holder Alibaba later this year. Alibaba’s of­fer­ing is ex­pected to raise about $15 bil­lion, ri­val­ing Face­book’s mas­sive pub­lic de­but in 2012.

Many saw a wor­ri­some sign in Weibo’s and Leju’s IPOs pric­ing at the low end of their re­spec­tive mar­keted ranges.

But Weibo, which trades un­der the sym­bol WB, ended the day at $20.24, up $3.24 af­ter it sold 16.8 mil­lion Amer­i­can de­posi­tary shares (ADSs) at $17 each, valu­ing the com­pany at $3.46 bil­lion. The com­pany had ear­lier planned to sell 20 mil­lion ADS at be­tween $17 and $19 each.

Weibo priced the shares at the lower end of the range be­cause of the re­cent US stock mar­ket tur­moil, par­tic­u­larly in tech­nol­ogy shares, Sina Chair­man and CEO Charles Chao said.

“Be­cause of the re­cent down­turn in the IPO mar­ket in the US, we are happy that we can still set Weibo’s IPO price at the bot­tom of our ini­tial tar­geted range,” Chao told re­porters ahead of the IPO.

The com­pany also in­ten­tion­ally sold fewer shares than ini­tially planned to lower di­lu­tion. “We wanted to have a deal that works from a mar­ket per­spec­tive,” a banker who de­clined to be named be­cause he was not au­tho­rized to speak to the me­dia, told Reuters.

Leju, trad­ing on the NYSE un­der the LEJU sym­bol, closed at $11.85, up $1.85. It had cut the size of its of­fer­ing by 44 per­cent, of­fer­ing 10 mil­lion shares at $10, the low end of the $10 to $12 range.

In­vestors, fear­ing stocks are over-val­ued, have re­cently be­gun turn­ing to safer sec­tors such as util­i­ties. Tech­nol­ogy and biotech­nol­ogy shares have borne the brunt of the pull­back, with the tech-heavy Nas­daq record­ing its big­gest drop in 2 1/2 years last week.

Since its launch in 2009, Weibo has be­come the go-to des­ti­na­tion for nearly 600 mil­lion In­ter­net users to dis­cuss ev­ery­thing from pol­i­tics to TV soap op­eras. But the ser­vice has been los­ing mar­ket share to mes­sag­ing apps such as Ten­cent Hold­ings Ltd’s WeChat. Un­like Weibo, where posts are vis­i­ble to any­one, WeChat con­ver­sa­tions are pri­vate.

“This has been seven years in the mak­ing, and good things come to those who wait,”

Mas­sachusetts Gover­nor De­val Patrick said at the lun­cheon at the Har­vard Club in Bos­ton.

De­val was re­fer­ring to meet­ings that his ad­min­is­tra­tion and the Mas­sachusetts Port Author­ity (Mass­port) have had with Hainan Air­lines since 2007.

Mass­port is an in­de­pen­dent pub­lic author­ity which de­vel­ops, pro­motes and man­ages air­ports, the sea­port and trans­porta­tion in­fra­struc­ture in Mas­sachusetts.

It awarded the Chi­nese air­line nearly $900,000 in sub­si­dies over two years to help make the long-awaited Bos­ton-Bei­jing route a re­al­ity. It in­cluded $541,000 in re­bated land­ing fees and $350,000 in mar­ket­ing sup­port.

When the air­line se­cured US ap­proval for the new route, Pu­bin Liang, man­ag­ing di­rec­tor of Hainan Air­lines in North Amer­ica, said that “busi­ness, leisure and ed­u­ca­tional travel and trade be­tween the United States and China has been grow­ing dra­mat­i­cally. This won­der­ful new link will stim­u­late this growth via the im­por­tant Bos­ton gate­way.”

“I think that over the last few years, we’ve been very suc­cess­ful at get­ting in­ter­na­tional flights, but I think that this one has had the most enthusiasm,” said Thomas Glynn, Mass­port’s CEO, at the lun­cheon.

The new route is be­ing in­tro­duced to serve the strong de­mand for busi­ness travel, “as well as grow­ing de­mand for leisure trips, be­tween Bos­ton, which is a cen­ter of higher ed­u­ca­tion,” Mass­port said in a state­ment.

Mas­sachusetts is home to Har­vard Univer­sity and the Mas­sachusetts In­sti­tute of Tech­nol­ogy (MIT), col­leges that many Chi­nese par­ents and stu­dents tour. Chi­nese in­ter­na­tional stu­dents made up about 40 per­cent of the in­ter­na­tional stu­dents study­ing at MIT in the fall of 2013, ac­cord­ing to the school’s provost of­fice.

The air­line is run­ning a pro­mo­tional sale for travel on June 20 for cus­tomers fly­ing busi­ness and econ­omy class to Bei­jing from Bos­ton, ac­cord­ing to its web­site.

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MICHAEL BAR­RIS / CHINA DAILY

Charles Chao (fourth from left), chair­man and CEO of Sina Corp, is joined by Chi­nese-Amer­i­can singer and song­writer Lee-Hom Wang (third from right) and other guests, cel­e­brat­ing the IPO of Weibo Corp, the mi­croblog­ging ser­vice owned by Sina, out­side the Nas­daq in New York on Thurs­day.

JACK FREIFELDER / CHINA DAILY

China’s Leju Hold­ings, an on­line real es­tate in­for­ma­tion and ser­vices plat­form, listed on the New York Stock Ex­change on Thurs­day.

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