New | Weibo’s shares surge 14pc on Alibaba takeover rumours

US-listed shares of Weibo, China’s version of Twitter, surged 14 per cent on Thursday following rumours that it could be acquired by Alibaba Group.

Alibaba, which is in the process of marketing its initial public offering, bought an 18 per cent stake in Weibo from Sina Corp for US$586 million in April last year, valuing China’s most popular social media firm at more than US$3 billion at the time.

Ahead of Alibaba’s public offering, Weibo raised US$286 million in April through a Nasdaq listing, valuing the company at US$3.8 billion.

A Reuters report said Alibaba’s recent acquisitions of mapping company AutoNavi and UCweb, a mobile browser company, were comparable in that Alibaba held sizeable stakes before making a deal, citing JG Capital analyst Henry Guo.

Guo said the takeover speculation was fuelled by the argument that Alibaba tended to acquire a minority stake in a takeover target and then sought full ownership if the initial investments bore fruits.