Sina Weibo files for $500 million US IPO

Twitter-like messaging service Weibo Corp filed Friday to raise $500 million from a US IPO.

Weibo, owned by Sina Corp, becomes one of the latest Chinese Internet giants to tap US markets, following on the heels of search service Baidu and its own corporate parent. Alibaba, which owns a stake in Weibo, is also expected to raise about $15 billion in the US this year.

But underscoring challenges facing Internet firms operating in a controlled media environment, Weibo warned investors in its IPO filing about uncertainty arising from Chinese government regulation.

Still, US investors have long shown an appetite for Chinese companies' stock, hoping to share in some of the spoils of the world's fastest-growing major economy.

US markets may see more IPOs from Chinese corporations in 2014 than in any year since 2010. That's despite long-simmering concerns among investors about Chinese accounting standards, the result of several high-profile auditing scandals in past years.

Weibo, one of several Chinese Twitter-like services, increased ad revenue by 163 percent to $56 million in the final three months of 2013. Overall revenues leapt almost three-fold to $188.3 million in 2013, from $65.9 million in 2012. And its net loss shrank to $38.1 million in 2013 from $102.5 million the previous year.

But its user growth is at risk of tailing off after three years of explosive expansion, as newer messaging apps such as Tencent Holdings Ltd's WeChat draw users away.

In January, an official government-backed Internet organization reported that user numbers for Chinese microblogs, including Sina Weibo, had fallen 9 percent in 2013.

However, Weibo said the number of its daily users had risen 36 percent to 61.4 million as of the end of December, from the same time a year before.

Weibo hired Goldman Sachs and Credit Suisse to manage its US debut, which it said would boost brand recognition and help retain talent.

Its proposed $500 million target is an estimate worked out solely for the purposes of calculating registration fees.