Chinese Twitter (TWTR) clone Weibo (WB) closed 19% above its U.S. initial public offering price on Thursday after slashing the offering size in an attempt to overcome tepid demand for momentum stocks.
The social media company raised $286 million by selling 16.8 million American depositary shares at $17 a piece. However, expectations were for a sale of 20 million shares at $17 to $19 each.
The IPO values Weibo, which means “micro blog” in Chinese, at about $3.5 billion.
Weibo opened at $16.27, representing a 4.3% discount to its IPO price. The trip in the red was brief, however, as Weibo closed at $20.24, up 19.06% on the day.
The social media company debuted on Nasdaq OMX Group's (NDAQ) Nasdaq Stock Market under the ticker symbol “WB.”
The fact that Weibo had to cut its offering size highlights the increased concern on Wall Street about high-valuation Internet and biotech names like Twitter, Tesla (TSLA), Facebook (FB) and Gilead Sciences (GILD).
Trading did not begin as expected at 11:40 a.m. ET, but Nasdaq told FOX Business the delay was not the result of a "tech issue." The exchange, which was infamously hit by problems during Facebook's (FB) IPO, said the time had been selected by Goldman Sachs (GS), the lead underwriter.
Weibo’s offering is being led by Goldman Sachs and Credit Suisse (CS). The underwriters have been granted a 30-day option to buy up to 2.52 million additional shares from Weibo to cover over-allotments.