Weibo, Leju go public in NYC
Pricing at lower end worried some, but both didn’t fail to perform well
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.
Find more on chinadailyusa. com
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.
China’s Leju Holdings, an online real estate information and services platform, listed on the New York Stock Exchange on Thursday.