Weibo Sees Stock Decline 3% Despite Doubled Income, Ads Revenue Surge
Shares of Weibo dropped more than 3 percent Wednesday despite strong results posted for the second quarter.
Weibo Corp. (Nasdaq: WB) saw its stock drop intraday despite posting strong results for the second quarter, with income nearly doubling and revenue soaring 68 percent year-over-year.
Soaring on advertising and marketing, revenue reached $426.6 million during the second three months compared with $253.4 million during the same period last year. Income was $140.9 million, or 62 cents per American depositary share, compared with $73.5 million, or 33 cents per share, a year ago.
Despite showing growth in earnings and revenue, the stock of the popular Chinese social media network fell to $80.56 per share, down more than 3 percent, in the afternoon Wednesday.
Shares of Weibo dropped more than 3 percent Wednesday afternoon to $80.56 apiece
despite strong revenue and income posted for the second quarter.
In a statement Wednesday, Weibo's chief executive officer, Gaofei Wang, said he was pleased with the company's growth momentum.
"As a leading social media platform with a full spectrum of media formats in China, we believe Weibo's larger user scale, enriched content ecosystem and strong social marketing capabilities will put us in a unique position to take advantage of the marketing budget shift toward mobile, social and video in the Chinese mobile internet market," Wang said.
Costs and expenses during the second quarter were $271.7 million, a 64 percent increase from a year ago, attributable to marketing expenses, brand promotion, and product development.
Weibo had 190 million average daily active users in June, a year-over-year increase of 31 million from a year ago, the company said.
Looking ahead, the company said it expects revenue in the range of $465 million to $475 million during the third quarter, representing an increase of 49 to 52 percent year-over-year.
The stock of the Chinese Internet company Sina Corp. (Nasdaq: SINA), which holds a 46 percent stake in China's Twitter-like social network Weibo, also dropped on Wall Street Wednesday without apparent reason, trading down nearly 7 percent by early afternoon.