Friday, November 23, 2012

Alibaba mulls stake in Sina Weibo

News this week: According to various media reports, China’s largest e-commerce company, Alibaba Group, is planning to buy a stake in NASDAQ-listed Sina’s Weibo, one of China’s most popular microblogging services.

Weibo, China’s equivalent of Twitter, is reportedly valued at around US$2 billion to US$3 billion, where Alibaba is looking to buy a 15%-20% stake. According to financial services provider Credit Suisse, the valuation is lower than its internal valuation of US$4.4 billion, but higher than the implied valuation of US$1.8 billion based on Sina’s closing share price on 16th November. In the first nine months of 2012, Weibo generated US$20 million in advertising revenue.

Alibaba and Sina both declined to comment on the deal.

Separately, Yahoo‘s filing to the U.S. Securities and Exchange Commission earlier this month reported Alibaba Group’s financial figures for the first nine months of the year. Alibaba Groups’s revenues were up 74% to US$2.9 billion, while profit in the period was up more than 300% to US$730 million. Alibaba’s net attributable income in the quarter from April-June was US$273 million, more than double year-on-year, while revenues rose 71% reaching US$1.1 billion.

This post is excerpted from BSG's weekly e-newsletter which is part of our subscription research service, BSG Tracker. Visit our website to find out more about this service. You can also follow us on Twitter for all the latest updates.

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