Sina Shares Fell Nearly 5% Ali To Increase Micro-Blog Holdings To Damage Valuation

Sina shares closed down nearly 5% on Monday, the lowest closing price since June last year, mainly due to market fears that Sina's micro-blog service's IPO (initial public offering) listing will result in its valuation impaired.

On the same day, Sina shares fell $2.77 in regular trading in the Nasdaq market, closing at $53.59, or 4.91%, while Sina's share price fell 13% in the three trading days up to Monday. In contrast, the Bloomberg China-US Equity Index, which tracks the most popular Chinese stock market in the US, dropped 0.8% today to 97.68. In the past 52 weeks, Sina's highest share price was $92.83, and its lowest price was $45.54.

Micro-blog has submitted a IPO prospectus to the US Securities and Exchange Commission (SEC) before it plans to sell 20 million shares. According to the IPO supplementary document submitted by micro-blog in April 4th, the company IPO The price range is set at $17 to $19 per share, which means that the valuation is as high as $3 billion 900 million.

Electric giant Alibaba The group agreed to acquire 18% of micro-blog's shares in 2013. According to the IPO prospectus, the Alibaba group will exercise a right in the IPO transaction of micro-blog to increase its shareholding to 32%. Alibaba group said last month that its acquisition of micro-blog shares would be 15% lower than the IPO price of the latter.

New York Investment Companies Maxim Group senior stock analyst Echo He In a telephone interview, it was pointed out: "(micro-blog) a decline in shareholding ratio means that Sina's valuation will be partially impaired. At least in the near future, Alibaba's holdings of micro-blog shares will lead to damage to the latter's IPO transaction. Since Alibaba group will buy micro-blog shares at a price lower than IPO, the dilution effect will encourage some investors to keep conservative pricing in micro-blog IPO transaction. "

Micro-blog plans to use IPO part of the proceeds to repay Sina's previous loans to it, Sina currently holds 78% of micro-blog shares. After the IPO transaction is completed, sina will have 80% of micro-blog's voting rights, while Alibaba group will have 15% of the voting rights. At the same time, Alibaba group has also said that the company plans to launch in the US IPO.