August 17, 2022

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Shares in Weibo Corp. WB -1.31% began trading in Hong Kong on Wednesday, demonstrating the...

Shares in
Weibo Corp.
WB -1.31%
began trading in Hong Kong on Wednesday, demonstrating the pull of the Asia financial hub as an alternative venue for Chinese companies whose stocks are already trading in the U.S.
Weibo, which operates a
Twitter
-like microblogging platform in China, has been listed on the
Nasdaq
Stock Market since 2014. It raised the equivalent of $385 million from its Hong Kong share sale ahead of the secondary listing.

The internet group joins Chinese companies, including Alibaba Group Holding Ltd., that have secured what are known as homecoming listings in Hong Kong since late 2019, following changes to local exchange rules. These listings have become a way to raise extra funds and put more of the company’s stocks into the hands of Asian investors, while also obtaining an insurance policy against a potential U.S. delisting.
Weibo made a lackluster debut on Wednesday, with its Hong Kong stock falling 7.2% from its offering price to HK$253.20, or the equivalent of $32.47. The fall partly reflected a drop in Weibo’s American depositary receipts, which have fallen since Weibo’s Hong Kong shares were priced on Dec. 2.
The social-media company is the 16th U.S.-listed Chinese business to add a Hong Kong listing since Alibaba’s landmark stock sale in November 2019, according to Dealogic, following others such as electric-car maker
Li Auto Inc.,
e-commerce company
JD.com Inc.
and video-streaming platform
Bilibili Inc.
Among the 16, Weibo’s listing is the smallest by funds raised.
Chinese ride-hailing giant
Didi Global Inc.
is also planning to go public in Hong Kong. Unlike its peers, it is explicitly gearing up to delist from New York, after suffering a rocky ride since its late-June initial public offering.
However, while the Hong Kong market has been bolstered by the rush of alternative listings, it is also contending with the fallout from a series of Chinese regulatory crackdowns on sectors such as e-commerce, property and tutoring.
The city’s flagship Hang Seng Index is down 12% so far this year, according to FactSet, while a sister index dedicated to technology is down 29%. Of the 75 companies that listed in Hong Kong this year, Dealogic data shows, 59 are trading below their offering price. The data includes IPOs and so-called secondary and dual-primary listings by groups whose shares already trade on other exchanges.
Much has changed since Weibo rang the bell in New York in 2014 to celebrate its $286 million Nasdaq IPO.
Since late 2020, Beijing has rolled out a long list of regulations and draft rules aimed at Chinese internet companies, covering areas such as personal information, data security, monopolistic behavior, algorithmic recommendations, children’s access to videogames and behavior in online fan groups for celebrities.
Even before the most recent increase in regulatory pressure, Weibo had to exert much tighter control over its platform than Western social-media networks do to avoid spreading politically controversial or otherwise problematic material. From the start of 2018 through June of this year, Weibo identified and disposed of about 438 million pieces of “inappropriate or illegal content,” the company said in its listing prospectus.

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Chinese Social-Media Giant Weibo Drops in Hong Kong Market Debut appeared first on maserietv.com.