The 2014 IPO market is full of hot tech companies going public, including social media IPOs – and the Weibo initial public offering will be the biggest of those this year.
If the name doesn't resonate stateside, it's because the company is a Chinese social media platform. But an $8 billion target for its IPO and a listing on an American stock exchange would certainly increase its name recognition in the United States.
Weibo is a microblogging site that operates similar to Twitter Inc. (NYSE: TWTR). It's owned by the Chinese online-media company Sina Corp. (Nasdaq: SINA). Founded in 2009, Weibo is Sina's most valuable subsidiary.
The $8 billion valuation Weibo is targeting would place the microblogging company at a 60% premium compared to the current $5 billion market cap of SINA.
Weibo claimed more than 61.4 million active users in December, which was up slightly from 60 million at the end of September. At the same time, Weibo announced that time spent on its site was up 16% in December 2013 from December 2012.
Sina has hired Credit Suisse AG and Goldman Sachs Group Inc. (NYSE: GS) to run the U.S. listing of Weibo. The U.S. listing is not surprising; SINA is listed on the Nasdaq. The company is reportedly attempting to raise $500 million through the IPO.
With an $8 billion valuation, a Weibo IPO would be one of the biggest initial public offerings of 2014. And there are several factors investors will watch closely as an IPO date approaches…
Weibo IPO: 3 Factors to Watch
The social media company reported its first operating profit last quarter at $3 million. That was on advertising revenue of $56 million, which was an increase of 163% from the previous year.
Growing that number throughout 2014 would go a long way in boosting investor confidence.
On the other hand, user numbers are somewhat worrisome…