Weibo’s stock soared in premarket trading following news that the company’s chairman and others were planning to take it private.
The potential privatization of Weibo is covered exclusively by Reuters (WB).
Weibo’s stock has dropped as the company claims that the Chairman has denied any negotiations.
Weibo shares are riding high on Tuesday, as one of the only Chinese equities to gain ground as the DIDI debate rages elsewhere, harming Chinese markets. Weibo shares, on the other hand, soared on Tuesday after a Reuters exclusive report said that Weibo (WB) Chairman Charles Chao was in talks to take the company private with a state investor. Reuters cited unnamed persons familiar with the situation. Weibo shares were up nearly 40% in premarket trading on Tuesdays. They are currently trading for $60.80, up 11% from the beginning of the year.
Weibo (WB) is a social media network for sharing content that is sometimes referred to as the Chinese Twitter. Users can produce and share content, as well as follow and interact with other users. It is primarily targeted towards the Chinese market.
Statistics from Weibo
$12.4 billion in market capitalization
Price/Earnings
39\sPrice/Sales
4 Enterprise Value $15 billion 7 Price/Book
Net Margin: 0.84 Gross Margin: 0.84 Gross Margin: 0.84 Gross Margin: 0.
0.17
Buy $56.71 based on the average Wall Street rating and price target
According to sources cited by Reuters, the proposed privatization of Weibo (WB) is expected to be completed by the end of the year at a price of $90-100 per share. This quickly made the stock a target for investors, who pushed it past $80 in premarket trading. According to Reuters, Chairman Charles Chao owns a major investment in Weibo through his New Wave holding firm.
However, the stock immediately lost ground after Weibo issued a statement in response to the rumors. “Weibo Corporation (“Weibo” or the “Company”) (NASDAQ: WB), a popular Chinese social media platform, announced today that its chairman Charles Chao and a state investor are in talks to take the company private, according to a Reuters report. In response to the Company’s enquiry, Mr. Chao stated that the aforementioned information is false and that he has had no discussions with anyone about the Company’s privatization.”
As a result, analyzing this one is difficult due to the stock’s current high level of volatility. On the chart, there is clearly a significant opening gap, which markets love to fill. More time will be needed to see how this plays out, but the nearly complete drop in price from $81 to $59.71 at the time of writing shows the matter has already been resolved in favor of no deal. On the daily chart, this still remains a significant gap to close to go back to $54. The volume profile, which shows limited volume support until the $48-50 zone, can also be used by bears./n
