Anderson Klein says that demand for Chinese technology sector Initial Public Offerings remains buoyant despite NASDAQ pullback.
Japan., April 17, 2014 - (PressReleasePoint) - Anderson Klein says that despite the sharp selloff in technology sector stocks over recent weeks, the appetite for Chinese tech sector IPOs remains buoyant.
The firm’s assertion comes as China’s Weibo priced its IPO at $17 per share, effectively towards the bottom of its planned range.
Weibo is a micro-blogging service very similar to Twitter which came to market last year and instantly created a multi-billion dollar corporation despite never having made a profit.
“We see the current appetite for both tech and biotechnology IPOs continuing for some tie yet but, of course, nothing lasts forever,” said an Anderson Klein technology sector researcher.
Weibo had planned to sell its shares in a relatively tight range between $17 and $19 but the recent selloff in the tech-heavy NASDAQ panicked its underwriters into seeking buyers at the lower end to ensure full subscription.
“Weibo is something of an unknown quantity insofar as, just like Twitter, it’s been losing money since the day it was launched,” said the researcher. “On the other hand, it will almost certainly make money given that Chinese consumers are far more tolerant of advertising than Westerners. Unfortunately, the company hasn’t made clear whether it has actually begun monetizing this as yet and that tells me investors should be cautious,” he added.
Weibo has 129 million active monthly users in 190 countries and is expected to raise $285 million when the shares begin trading under the “WB” ticker symbol on the Nasdaq.
Anderson Klein says it is eagerly awaiting the debut of Chinese internet giant, Alibaba which should be the largest tech sector IPO since Facebook’s in 2012.