Alibaba Considers Selling Weibo Shares... Negotiations with Chinese State-Owned Media Company Underway

[Image source=AFP Yonhap News]

[Asia Economy Reporter Park Byung-hee] Alibaba is reportedly considering selling its stake in Weibo. This is interpreted as a move to avoid ongoing controversies related to Weibo amid increased regulatory pressure on internet companies by Chinese authorities.

Bloomberg News reported on the 29th (local time), citing sources, that Alibaba Group is in discussions with Shanghai Media Group regarding the sale of its stake in Weibo. However, the source stated that the talks are still at an early stage, and it is uncertain whether any concrete outcome regarding the sale of Weibo shares will be reached.

Alibaba currently holds about 30% of Weibo's shares. Alibaba also owns stakes in various media companies such as the Hong Kong English-language outlet South China Morning Post (SCMP), Caijing, and Mango TV. Among these, Weibo is the most influential media company in which Alibaba holds shares. Alibaba's active user base is approximately 248 million, surpassing Twitter's 211 million.

The Chinese government has been uncomfortable with Alibaba's significant influence on public opinion through Weibo and is reportedly seeking for Alibaba to sever its ties with Weibo.

Shanghai Media Group is a large state-owned media company in China. Since it is a state-owned enterprise, it is expected that government approval would be easier to obtain if Alibaba proceeds with selling its stake in Weibo.

Weibo was listed on the NASDAQ stock exchange in New York in 2014. On the 8th of this month, it also began trading on the Hong Kong stock exchange. Through its Hong Kong listing, Weibo raised $385 million.

Currently, Weibo's stock price on the Hong Kong exchange has dropped about 16% below its initial public offering price. The Cyberspace Administration of China (CAC) fined Weibo 3 million yuan (approximately 560 million KRW) shortly after its Hong Kong listing for allegedly neglecting illegal content.

This content was produced with the assistance of AI translation services.