While Chinese authorities have recently launched an Internet security review of companies listed on the U.S. stock market, a report said on the 6th (local time) that “Chinese Twitter” Weibo, which is listed on the NASDAQ, is discussing delisting.
Citing multiple sources, Reuters reported that Charles Chao, chairman of Weibo’s board of directors, is working with a Chinese state-run company in Shanghai to form a consortium to transform Weibo into an unlisted company.
In particular, the consortium added that it is considering proposing a per-share price of $90-100 to convert Weibo into an unlisted company.
This is a premium of 80-100% on Weibo’s average stock price of $50 last month, which is worth $20 billion.
Reuters reported that the deal is aimed at closing by the end of this year, and Weibo may be re-listed on the Chinese stock market after the abolition of the Nasdaq listing.
Sources said Weibo’s plan to delist Weibo, which currently owns a 30 percent stake in Weibo, is aimed at getting out of Weibo, which has become an online communication channel in China, with more than 500 million Chinese people using it.
After Alibaba founder Ma Yun strongly criticized Chinese financial authorities at a financial summit in Shanghai in October last year, Chinese authorities have put all-out pressure on Alibaba and its fintech affiliate Ant Group.
How’s Wibo Statement?
However, Weibo issued a statement on the Reuters report, saying, “It is not true,” and “Chairman Charles Chao also informed us that he had never discussed Weibo’s unlisted transition.”
Weibo shares once rose more than 50% in pre-opening trading on the Nasdaq market, but returned a significant portion of the gains in regular trading, closing the day at a 6.32% gain.
Meanwhile, the Internet Security Tribunal, an organization affiliated with China’s Internet Information Commission, announced on the 5th that it will conduct Internet security screening for Wynman Bay, Huo Prescription and BOSS Zippin to prevent national data security risks, protect national security, and guarantee public interest.
As a result, the number of companies subject to the “Internet Security Review” by the Chinese authorities has increased to three, including Didi Chuxing, all of which are listed on the U.S. stock market.
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