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The Weibo Corp. (Nasdaq: WB) IPO price was a disappointment to investors today (Thursday) when the company offered shares at the low end of its proposed $17 to $19 range.
But that didn't stop the stock from soaring more than 44% today in its first trading day…
Weibo is a micro-blogging site in China that operates similarly to Twitter Inc. (NYSE: TWTR). The social media site allows users to send short, public messages, and lets followers comment and repost. The site was launched in 2009 and boasted 144 million monthly active users as of March 2014.
The company raised $286 million in its IPO by selling 16.8 million shares at $17 each. That gives Weibo a valuation of approximately $3.4 billion.
The decision to set a lower IPO price paid off early for WB stock, as the stock touched a high of $24.48 this afternoon.
A Reuters report cited an unnamed banker familiar with the deal who said, "We wanted to have a deal that works from a market perspective."
Weibo had previously planned on raising $360 million by offering 20 million shares. The company decided to sell fewer shares at a lower price following the recent sell-off in the tech sector.
The Nasdaq Composite had dropped more than 4% in the last month. Many technology momentum stocks have fared much worse, however. In the last month, shares of Google Inc. (Nasdaq: GOOG) have dropped 10%, shares of Tesla Motors Inc. (Nasdaq: TSLA) have slid 14%, and shares of Netflix Inc. (Nasdaq: NFLX) have dipped 19%.
Weibo's parent company Sina Corp. (Nasdaq: SINA) has been hit hard by the recent tech sell-off, down 17% in the last month. However, today's IPO sent SINA shares up 9% in afternoon trading.
By pricing shares lower, the company hoped to bring in investors who may have feared the stock was overpriced. According to Reuters, Weibo also offered fewer shares than initially planned in an attempt to lower dilution.
While the company raised less money than it had initially planned, the 44% pop in the stock's first few hours of trading suggests the strategy paid off.
So with the Weibo IPO price concerns behind us, what's next for the stock?
For investors contemplating buying WB stock now, here are the most important factors to consider…
my neighbor purchased motor cycles from a distributor of allibaba nice lookin sold retail under eighteen hundred dollars ,nice lookin but had broblems mechanical,he sold mannnny, i searched alibaba,,, very broad items of all sources, when i seen on my computer that alibaba was going public i got GOOSEMUMPS along with THE CHILLS ,i just knew i had to purchased this stock, unfortunatly i only had under two thousand in my scottrade acct, i called my agent ,buy as much as u can ,,, i got in under 17 buckeronies,,, every stock i ever bought was always 1000 shares, had… Read more »