Weibo (Nasdaq: WB) has selected banks for its planned secondary Hong Kong listing that could raise as much as $700 million.
China’s largest microblogging platform, similar to Twitter (NYSE: TWTR), has picked Credit Suisse, Goldman Sachs, and CLSA to work on the deal, as reported by Reuters today, citing two sources familiar with the situation.
Weibo is mulling the sale of roughly 5% of its enlarged share capital in Hong Kong to expand its investor base, the news outlet added. Currently, Weibo’s Nasdaq-listed shares command a market capitalization of $12.6 billion.
Last week, Bloomberg reported that Weibo has been working on its secondary listing with advisors.
U.S.-listed Chinese firms have flocked to Hong Kong ever since e-commerce giant Alibaba (NYSE: BABA; HKEX: 9988) completed its $13 billion offering in the city in November 2019. Over the past 12 months, large-cap firms including online retailer JD.com (Nasdaq: JD; HKEX: 9618) and gaming giant NetEase (Nasdaq: NTES; HKEX: 9999) have completed their secondary listings in Hong Kong, collectively raising more than $7 billion. Since Alibaba’s Hong Kong share sale, companies have raised $34 billion in secondary listings, data from Refinitiv shows.
Along with Weibo, China’s largest search engine Baidu (NYSE: BIDU), and music conglomerate Tencent Music Entertainment Group (NYSE: TME) are pursuing secondary listings that could fetch $3.5 billion each, Bloomberg has reported.
Some Chinese firms with U.S listings have pursued share sales closer to home amid continued trade tensions between Beijing and Washington.
Parent Sina Corp. (Nasdaq: SINA) established Weibo in 2009, which has developed into one of the largest social media platforms in China. As of September, Weibo had 511 million monthly active users. Alibaba holds a minority stake in Weibo.
In the third quarter, Weibo posted revenues of $465.7 million on earnings of 15 cents per share. The results were mixed, as analysts were looking for revenues of $451.4 million on profit of 51 cents per share.
In early trading Tuesday, the stock in Weibo dropped 4% to $55.84 per American depositary share. Shares of Weibo have risen 36% year-to-date.
Weibo’s listing could happen in the second half of 2021, according to Reuters.