Weibo chairman denies reports of company’s privatization plans

Source: Business of Apps

China’s Twitter rival, Weibo is a social media platform for microblogging, just like Twitter, the platform allows its users to post microblogs on the website, keeping the Chinese community connected. Weibo has come into the primary zone after the Chinese government banned Twitter from their mainland over non-compliance to government orders. However, post that action, Weibo became the number one microblogging platform in China but it is subject to government and state censorship.

Having said that, Reuters published a report recently claiming that Weibo Chairman and a Chinese State investor are planning to take Weibo private. Speculations were pointing that the deal could value Weibo at more than USD 20 billion and will mark the exit of Alibaba from the company. Sources further mentioned that Weibo shall eventually relist in China to capitalize on higher valuations.

However, a Weibo representative denied the Reuters report saying that the company has no such plans towards privatization. Thus, the talks between Weibo’s chairman and State investor for taking the company private turns out to be mere speculations that have been clearly denied by the company.

Reuters mentioned in its report that the deal would value Weibo at USD 20 billion and ease the exit of one of its primary shareholders- Alibaba Group Holdings Ltd. However, there was no news on which Chinese state firm was in the deal with Weibo.

Anyways, it does not matter now because the microblogging company has denied all plans of going private. However, the representative for Weibo told Bloomberg that the speculations were not true, further declining to elaborate on the context. According to a report by Bloomberg Quint, Charles Chao, Weibo’s Chairman confirmed the news informing that the story published by Reuters is untrue and he has had no discussion with anyone regarding the privatization of the company.

One thing happened, before the company’s denial on the matter, its shares jumped over 40 percent in early trading in New York. Reports suggest that the trading was happening at a 10 percent increase to USD 59.90.

Having said that, Weibo is the most popular social media platform in China that has replaced Twitter, as it is blocked by the government. Since the company’s launch back in 2009, Weibo has grown at a fast chip, and today, more than 500 million Chinese users use the app to talk about everything, same as Twitter. The company went public on the NASDAQ back in 2014 and reportedly makes most of its revenue from online advertising. After a share market fall of 12 percent in 2020, the company rises back up again with a 33 percent increase.