China's Weibo Sets 20 Mln ADS IPO To Raise Up To $437 Mln

(RTTNews) - Chinese twitter-like microblogging service Weibo Corp. revealed in a regulatory filling on Friday its now plans to raise only up to $437 million in an initial public offering of its American depositary shares, or ADS in the U.S. The company trimmed the amount it plans to raise from the original $500 million.

It is being spun-off through the IPO by its parent Chinese online media company Sina Corp. (SINA).

In an amended Form F-1 filing with the U.S. Securities and Exchange Commission, Weibo said it plans to sell 20 million ADS at an estimated pricing range of $17.00 to $19.00 per ADS. The company intends to list the ADSs on the NASDAQ Global Select Market under the ticker symbol "WB."

The company also said it has granted underwriters a 30-day option to buy up to an additional 3.0 million common shares at the IPO price less the underwriting discount, to cover over-allotments, if any.

Weibo said it intends to use about $250 million of the net proceeds from the offering to repay loans it owes to its parent company and controlling shareholder, SINA, with the remainder to be used to invest in technology, product development, to expand sales and marketing efforts, as well as for working capital.

Credit Suisse Group AG (CS) and Goldman Sachs (Asia) L.L.C. are the lead underwriters for the offering, with Morgan Stanley, Piper Jaffray and China Renaissance servings as co-underwriters.

The IPO will give the company a market valuation of about $3.87 billion, based on 91,463,671 Class A ordinary shares and 115,088,031 Class B ordinary shares outstanding immediately after the offering.

This is about half the $8 billion valuation it was looking for earlier in the year, based on reports in February that indicated that the company is expected to raise about $700 million.

However, in the initial registration statement filed with the SEC on March 14, the company said it plan to raise only up to $500 million in an IPO of its American depositary shares.

Beijing, China-based Weibo is a Chinese micro-blogging site launched on August 14, 2009 which helps people to create, distribute and discover Chinese-language content. In March 2014, Weibo had 143.8 million monthly active users and 66.6 million average daily active users. For the year ended December 2013, the company's net loss narrowed to $38.1 million from last year's loss of $102.5 million, while revenue surged to $188.3 million from the prior year's $65.9 million.