Sina Corp. (SINA) has selected banks for an initial public offering of Sina Weibo, its Twitter-like microblogging service, that could raise about $500 million, said two people with knowledge of the matter.
Credit Suisse Group AG and Goldman Sachs Group Inc. are working on the planned U.S. listing, said the people, who asked not to be identified because the information is private. The share sale may start in the second half, one of the people said.
The planned offering comes as Sina Weibo faces competition from Tencent Holdings Ltd. (700)’s WeChat messaging application. The Weibo business came close to breaking even in the third quarter as its advertising revenue more than doubled from a year earlier, Sina said Nov. 12.
Alibaba Group Holding Ltd., China’s biggest e-commerce company, agreed in April to buy an 18 percent stake in Sina Weibo for $586 million. Alibaba, founded by billionaire Jack Ma, also plans to go public in 2014, people familiar with the situation said in October.
Chinese companies raised $907 million in U.S. initial offerings last year, more than five times the amount for 2012, according to data compiled by Bloomberg. Online retailer JD.com Inc., backed by Saudi billionaire Prince Alwaleed bin Talal, last month filed to seek $1.5 billion in what would be the largest IPO of a Chinese Internet company in the U.S.
Liu Qi, a Beijing-based spokesman for Sina, declined to comment on whether the company hired banks for an IPO in the U.S. The Financial Times reported the plan on its website earlier today, citing unidentified people familiar with the matter.
Sina Weibo is the country’s most popular microblogging outlet, with 60.2 million daily active users by the end of September, Sina Chief Executive Officer Charles Chao said Nov. 12. The company is looking into a listing of the business, Chao told analysts after the company’s third-quarter results.
Facebook Inc. agreed Feb. 19 to buy mobile-messaging startup WhatsApp Inc. for as much as $19 billion, highlighting the value of fast-growing communication services. Twitter Inc., the San Francisco-based microblogging service, raised $2.1 billion in its November initial public offering, according to data compiled by Bloomberg.
Users of China’s microblogs fell for the first time last year amid a government crackdown on spreading rumors. The number of users dropped 9 percent from a year earlier to 281 million at the end of 2013, according to the China Internet Network Information Center.
China has signaled that it sees online dissent as a threat to the governing Communist Party’s authority. Some microbloggers were arrested after a September rule made it a jailable offense to spread false rumors online.
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