Weibo is a Twitter-like messaging service based in China. On Friday, the company announced it was planning to raise $500 million through a U.S.-based IPO. Sina Corporation’s Weibo is one out of several Chinese Internet companies that have turned to the U.S. stock market for an IPO. Another recent Chinese Internet company that went public on the U.S. market was Baidu. Weibo warned investors in its IPO filing about uncertainty from Chinese government regulation.
The Chinese government could place users that write defamatory or false information about authorities could face up to 3 years in jail. Weibo could also face potential government intervention in its encryption tools and software.
Weibo’s revenues jumped around three-fold to $188.3 million in 2013 from $65.9 million in 2012. Losses shrank to $38.1 million in 2013 from $102.5 million in the previous year.
Weibo is also facing intense competition from Tencent’s WeChat. Weibo said that its daily users rose 36% to 61.4 million. Weibo hired Goldman Sachs and Credit Suisse to manage the U.S. based IPO.