…Weibo, China’s micro-blogging answer to Twitter, should have confirmed what everyone suspected, that technology stocks were yesterday’s story. After all it hasn’t even managed to make a profit yet.
Instead it got itself successfully floated on the Nasdaq on Thursday and gave investors a one-day 19% gain in return for their confidence.
Certainly Weibo was priced cheaply – but Rett Wallace, chief executive of Triton Research, says there’s good evidence to support the optimism.
“One of the things to remember about Weibo is that it is really a joint venture between two very large Chinese conglomerates, Sina on one hand and Alibaba on the other. Investors in the American market have dealt in for a small piece of the financial ownership of that company.
“But the revenue base of this company is very healthy. It’s only been generating revenues since 2012. We think it’ll do more than $300m (£178m) in revenues this year and might even show a profit for the year.”
