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Chinese online media giant Sina taken private after 20 years on Nasdaq

Written by Wency Chen Published on 

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Sina CEO Charles Chao and his company New Wave will pay roughly USD 2.6 billion for the outstanding ordinary shares.

Sina (NASDAQ: SINA), the internet portal and owner of microblogging service Weibo (NASDAQ: WB), on Monday night announced that it has entered into a definitive agreement for a delisting from Nasdaq. CEO Charles Chao’s company New Wave will pay roughly USD 2.6 billion for Sina’s outstanding ordinary shares, marking the end of the Chinese internet pioneer’s 20-year listing.

According to a news release, the investors are buying Sina’s stock for USD 43.3 per share, 5% more than the proposed price in July, and an 8% premium on its closing price from Friday. The shares rose by 5.87% on Monday, closing at USD 42.55, representing a market capitalization of nearly USD 2.8 billion. Sina expects the deal to be completed in the first quarter of next year.

Founded in 1998, the company captured the popular embrace of the internet back in the 90s and early 2000s, and its homepage became the internet front door for Chinese netizens. Sina went public on Nasdaq in 2004 with an IPO price of USD 17.5, as the first US-listed Chinese internet company. In 2011, Sina’s stock hit USD 147 per share at its peak. However, a decade later, with the rapid growth of the mobile internet, Sina lost the throne for failing to diversify its revenue sources, in spite of owning the popular Twitter-like social media platform Weibo.

In the meantime, former competitors like NetEase (NASDAQ: NTES; HKSE: 9999) and Tencent (HKSE:0700) expanded to online entertainment and upstarts such as ByteDance and Kuaishou took shape. On September 18, Sina reported second-quarter earnings with net revenues decreasing 5% year-on-year (YoY) to USD 507.7 million while advertising revenues—its main business—dropped 10% YoY to USD 392.2 million.

Its most valuable asset Weibo, which went public separately in 2014, generated USD 387.4 million in net revenue for the second quarter, down 10% YoY, as proceeds from advertising and marketing decreased 8% YoY to USD 340.6 million. The microblogging service had 229 million average daily active users in June 2020. Weibo shares closed at USD 34.96 on Monday, up 7.44%, at a market cap of USD 7.92 billion.

Sina is not the only Chinese company retreating from the US capital markets, at a time when US regulators are tightening rules and scrutiny, whereas domestic exchanges such as Shanghai’s Star market and Shenzhen’s ChiNext are rolling out friendlier policies.

Among the firms seeking a listing closer to home are classifieds platform 58.com (NYSE: WUBA), advertising and content provider Bitauto (NYSE: BITA), as well as Alibaba (NYSE: BABA; HKSE:9988), NetEase, and JD.com (NASDAQ: JD; HKSE: 9618) which have already listed in Hong Kong.

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