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Exclusive: Weibo chairman, state firm plan to take China’s Twitter private -sources

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HONG KONG (Reuters) – Nasdaq-listed Weibo Corp’s chairman and a Chinese state investor plan to take China’s answer to Twitter private, sources told Reuters, sending its shares as much as 50% higher on Tuesday.

The booth of Sina Weibo is pictured at the Beijing International Cultural and Creative Industry Expo, in Beijing, China May 29, 2019. REUTERS/Stringer/Files

A deal could value Weibo at over $20 billion, facilitate shareholder Alibaba’s exit, and see Weibo eventually relist in China to capitalise on higher valuations, the sources said.

Chairman Charles Chao’s holding company New Wave, Weibo’s top stakeholder, is teaming up with a Shanghai-based state company to form a consortium for the deal, three sources said, without disclosing the state firm’s identity.

The consortium is looking to offer about $90-$100 per share to take Weibo private, two of the sources said, representing a premium of 80%-100% to the stock’s $50 average price over the past month.

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The group aims to finalise the deal this year, they said.

Reuters reported in February that Weibo had hired banks to work on a Hong Kong secondary listing in the final half of 2021. Sources said this is no longer the plan.

Shares in Weibo, which operates a platform similar to Twitter, surged more than 50% in pre-open trade after the Reuters report before gaining more than 10% in early New York trade.

Chao did not respond to Reuters’ request for comment via Weibo parent company Sina.

WEIBO STATEMENT

Weibo issued a statement in which it said that Chao and a state investor being in talks to take the company private was untrue.

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Weibo cited Chao as saying he had had no discussion with anyone regarding delisting the company.

Weibo and Alibaba did not respond to Reuters requests for further comment.

Yet three separate sources with knowledge of the matter told Reuters the plans stem from Beijing’s drive to have Alibaba Group Holding Ltd and affiliate Ant divest their media holdings to rein in their sway over Chinese public opinion.

All the sources declined to be named due to confidentiality constraints.

Alibaba held 30% of Weibo as of February, the latter’s annual report showed, which was worth $3.7 billion as of Friday’s close.

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REGULATORY CRACKDOWN

Beijing has looked to rein in Chinese billionaire Jack Ma’s Alibaba business empire by unleashing a series of investigations and new regulations since last year.

The crackdown followed Ma’s public criticism of regulators in a speech in October last year and has swept across China’s money-spinning internet sector in recent months.

E-commerce giant Alibaba has invested in nearly 30 media and entertainment firms including Hong Kong’s flagship English-language newspaper South China Morning Post, Refinitiv data shows.

Chao’s mooted deal would likely see it exit Weibo, two of the sources said.

The plan also reflects China’s efforts to tighten control over private media and internet businesses, sources added.

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U.S.-listed Chinese firms also face heightened scrutiny and potentially stricter audit requirements from U.S. regulators, amid political tensions between Beijing and Washington.

A number of Chinese companies have already opted out of U.S. stock exchanges, by going private or returning to equity markets closer to home via second listings.

There were 16 announced delistings of U.S.-listed Chinese companies worth $19 billion last year, Dealogic data showed, compared to just five such deals worth $8 billion in 2019.

China’s cabinet said on Tuesday that it would step up supervision of firms listed offshore citing the need to improve regulation of cross-border data flows and security.

FIERCE COMPETITION

Weibo has grown at a fast clip since its launch in 2009 in a market where Twitter is blocked by the government. More than 500 million Chinese use Weibo to opine on everything from Korean soap operas to China’s latest political intrigue.

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Alibaba acquired an 18% stake in Weibo in 2013 via a $586 million investment as its first big move into selling advertisement on China’s social networks. It has since raised its stake.

Weibo, which went public on the Nasdaq in 2014, makes most of its revenue from online advertising.

That has worried investors as the growth rate of Chinese online advertising slows and Weibo has also lost ground amid competition with other tech giants such as ByteDance and Tencent.

The Beijing-based company advertising and marketing revenue fell 3% last year to $1.5 billion.

Its shares are up 33% this year, after a fall of 12% in 2020.

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Reporting by Julie Zhu and Pei Li in Hong Kong; Editing by Sumeet Chatterjee, Jason Neely and David Goodman

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Elon Musk Says He’ll Pay $11 Billion in Taxes in 2021 But Twitter Wants ‘Proof’

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Elon Musk took to Twitter to clarify once and for all that he will be paying a whopping $11 billion as taxes this year.

If the number of times Elon Musk could count when someone has asked him to pay the full taxes, he would be a very rich..wait, never mind. The Tesla boss is rich beyond any private individual has been in history, reports said.

Musk has increasingly been facing criticism from many politicians and many others who insist he has not been paying taxes as compared to the profits his companies have been making. On Sunday, the SpaceX CEO took to Twitter to share that he will be paying a whopping $11 billion as taxes.

For those wondering, I will pay over $11 billion in taxes this year— Elon Musk (@elonmusk) December 20, 2021

But some of the questions did not stop. One person tweeted how they needed to see Musk’s tax returns while yet another asked how much percentage was that of his total income.

A few were, however scathing of the government who thought they will add that amount to their pockets rather than using it for some proper development.

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Wow that’s enough to give each person in the world almost $2 million but instead the government will just stick it in their pockets— greg (@greg16676935420) December 20, 2021

Why not $200 billion? Asking for a Senator— litquidity (@litcapital) December 20, 2021

Earlier this week, Democratic US Senator Elizabeth Warren has tweeted to say that Musk should pay taxes and stop “freeloading off everyone else” after Time magazine named him its “person of the year”.

In response, Musk shot four tweets in which he said that the senator reminded him of a friend’s angry mom who yelled at everybody. He tweeted, ““And if you opened your eyes for 2 seconds, you would realize I will pay more taxes than any American in history this year.” “Don’t spend it all at once … oh wait you did already.”

He added further, “You remind me of when I was a kid and my friend’s angry Mom would just randomly yell at everyone for no reason.”

Musk responded by saying that he “will pay more taxes than any American in history this year”. This Twitter exchange left netizens divided as even though many supported Warren and agreed that Musk should pay more taxes, others felt that he was already doing enough.

Musk’s Tesla is worth about $1 trillion. Over the last few weeks, he has sold nearly $14 billion worth of Tesla shares.

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The Tesla boss has been pushing for his colonize Mars agenda for years now, and has made it very clear in some occasions that he would rather spend the money on putting humanity on the red planet, than pay his taxes. “My plan,” the SpaceX founder tweeted about his fortune, “is to use the money to get humanity to Mars and preserve the light of consciousness.”

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Twitter Admits Policy ‘Errors’ After Far-Right Abuse Its New Rules of Posting Pictures

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Twitter’s new picture permission policy was aimed at combating online abuse, but US activists and researchers said Friday that far-right backers have employed it to protect themselves from scrutiny and to harass opponents.

Even the social network admitted the rollout of the rules, which say anyone can ask Twitter to take down images of themselves posted without their consent, was marred by malicious reports and its teams’ own errors.

It was just the kind of trouble anti-racism advocates worried was coming after the policy was announced this week.

Their concerns were quickly validated, with anti-extremism researcher Kristofer Goldsmith tweeting a screenshot of a far-right call-to-action circulating on Telegram: “Due to the new privacy policy at Twitter, things now unexpectedly work more in our favor.”

“Anyone with a Twitter account should be reporting doxxing posts from the following accounts,” the message said, with a list of dozens of Twitter handles.

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Gwen Snyder, an organizer and researcher in Philadelphia, said her account was blocked this week after a report to Twitter about a series of 2019 photos she said showed a local political candidate at a march organized by extreme-right group Proud Boys.

Rather than go through an appeal with Twitter she opted to delete the images and alert others to what was happening.

“Twitter moving to eliminate (my) work from their platform is incredibly dangerous and is going to enable and embolden fascists,” she told AFP.

In announcing the privacy policy on Tuesday, Twitter noted that “sharing personal media, such as images or videos, can potentially violate a person’s privacy, and may lead to emotional or physical harm.”

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But the rules don’t apply to “public figures or individuals when media and accompanying Tweets are shared in the public interest or add value to public discourse.”

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By Friday, Twitter noted the roll out had been rough: “We became aware of a significant amount of coordinated and malicious reports, and unfortunately, our enforcement teams made several errors.”

“We’ve corrected those errors and are undergoing an internal review to make certain that this policy is used as intended,” the firm added.

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Jack Dorsey Post Twitter Is Chasing His Crypto, Fintech Dream

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At a packed Miami conference in June, Jack Dorsey, mused in front of thousands of attendees about where his real passion lay: “If I weren’t at Square or Twitter, I’d be working on Bitcoin.”

On Monday, Dorsey made good on one part of that, announcing he would leave Twitter for the second time, handing the CEO position to a 10-year veteran at the firm. The 45-year-old entrepreneur, who is often described as an enigma with varied interests from meditation to yoga to fashion design, plans to pursue his passion which include focusing on running Square and doing more philanthropic work, according to a source familiar with his plan.

Well before the surprise news, Dorsey had laid the groundwork for his next chapter, seeding both companies with cryptocurrency-related projects.

Underlying Dorsey’s broader vision is the principle of “decentralisation,” or the idea that technology and finance should not be concentrated among a handful of gatekeepers, as it is now, but should, instead, be steered by the hands of the many, either people or entities.

The concept has played out at Square, which has built a division devoted to working on projects and awarding grants with the aim of growing Bitcoin’s popularity globally. Bitcoin price in India stood at Rs. 44.52 lakh as of 12:50pm IST on December 1.

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Dorsey has been a longtime proponent of Bitcoin, and the appeal is that the cryptocurrency will allow for private and secure transactions with the value of Bitcoin unrelated to any government.

The idea has also underpinned new projects at Twitter, where Dorsey tapped a top lieutenant – and now the company’s new CEO Parag Agrawal – to oversee a team that is attempting to construct a decentralised social media protocol, which will allow different social platforms to connect with one another, similar to the way email providers operate.

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The project called Bluesky will aim to allow users control over the types of content they see online, removing the “burden” on companies like Twitter to enforce a global policy to fight abuse or misleading information, Dorsey said in 2019 when he announced Bluesky.

Bitcoin has also figured prominently at both of his companies. Square became one of the first public companies to own Bitcoin assets on its balance sheet, having invested $220 million (roughly Rs. 1,650 crore) in the cryptocurrency.

In August, Square created a new business unit called TBD to focus on Bitcoin. The company is also planning to build a hardware wallet for Bitcoin, a Bitcoin mining system, as well as a decentralised Bitcoin exchange.

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Twitter allows users to tip their favourite content creators with Bitcoin and has been testing integrations with non-fungible tokens (NFTs), a type of digital asset that allows people to collect unique digital art.

Analysts see the transition as a positive signal for Square, the fintech platform he co-founded in 2009. Square’s core Cash App, after a bull run in its share in 2020, has experienced slower growth in the most recent quarter. It is also trying to digest the $29 billion (roughly Rs. 2,17,240 crore) acquisition of Buy Now Pay Later provider Afterpay, its largest acquisition ever.

But these ambitions will not pay off until years from now, analysts cautioned.

“The blockchain platform they’re trying to develop is great but also fraught with technical challenges and difficult to scale for consumers. I think he’ll focus more on Square and crypto will be part of that,” said Christopher Brendler, an analyst at DA Davidson.

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© Thomson Reuters 2021

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Interested in cryptocurrency? We discuss all things crypto with WazirX CEO Nischal Shetty and WeekendInvesting founder Alok Jain on Orbital, the Gadgets 360 podcast. Orbital is available on Apple Podcasts, Google Podcasts, Spotify, Amazon Music and wherever you get your podcasts.

Cryptocurrency is an unregulated digital currency, not a legal tender and subject to market risks. The information provided in the article is not intended to be and does not constitute financial advice, trading advice or any other advice or recommendation of any sort offered or endorsed by NDTV. NDTV shall not be responsible for any loss arising from any investment based on any perceived recommendation, forecast or any other information contained in the article.

(This story has not been edited by NDTV staff and is auto-generated from a syndicated feed.)

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