Shares of Chinese social media giant Weibo fall on Hong Kong debut
Social media giant Weibo made its Hong Kong stock market debut as Chinese tech companies come under severe pressure at home and abroad.
Shares of Weibo fell more than 6% in the first few minutes of trading.
The company joins other major Chinese technology companies, including Alibaba and JD.com, which are listed in both the US and Hong Kong.
It comes just days after Chinese giant Didi said it would move its listing to Hong Kong from the United States.
Weibo raised $ 385 million (£ 290 million) from the Hong Kong secondary listing.
The company’s shares listed in the United States have lost about a third of their value over the past six months.
Why is Weibo listed in Hong Kong?
Trade tensions between Washington and Beijing, which increased significantly during the Trump administration, show little sign of easing under President Biden.
Chinese companies that have their shares listed in the United States have found themselves trapped in the midst of the ongoing quarrel between the world’s two largest economies.
In recent months, Beijing has increased its oversight of China’s largest enterprises, with the technology industry under particular scrutiny.
Meanwhile, the United States Securities and Exchange Commission (SEC) has come up with rules that would mean that foreign companies listed in the United States can be de-listed if their auditors fail to comply with requests for information from regulators. .
Some Chinese companies are now looking for alternative funding sources in case they need to take their shares out of US equity markets.
“It would be disastrous if all Chinese companies were forced to delude from US trade. Despite intense competition between the two countries, they need, must and must be financially, economically, technologically, socially and culturally interdependent,” Nina Xiang said. the CEO of China Money Network in Hong Kong.
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Will Weibo follow Didi out of the US?
Last week, racing giant Didi Global said it would withdraw its shares from the New York Stock Exchange and move its listing to Hong Kong.
It has raised $ 4.4 billion since its US market debut in late June, but within days, China’s internet regulator ordered online stores not to offer Didi’s app, claiming it was illegally collecting personal data. users.
Didi’s announcement that he was planning to delist in the United States came just hours after the SEC announced that it was pursuing its efforts to remove Chinese companies from U.S. exchanges for failing to comply with the new accounting rules.
Shares of Didi have fallen by more than 50% in the five months since they began trading in New York.
Ms. Xiang believes Weibo should be safe for now: “Much depends on whether Chinese and American regulators can work through their differences to reach a solution on access to control documents.”
What is Weibo?
Weibo is the Chinese word for microblog, and the company is known as the national version of Twitter.
It was launched in 2009 and now has more than 570 million monthly users, compared to Twitter’s 211 million monthly users.
The company is China’s second largest social media platform, after tech giant Tencent’s WeChat.
China is the largest social media market in the world, with over 900 million users.
Major US platforms like Twitter and Facebook are blocked in China, which means the country offers huge growth potential for domestic social media companies like Weibo.
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