Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.
What: Shares of Chinese Internet portal SINA (NASDAQ:SINA) climbed 10% today on reports that China's largest e-commerce company Alibaba Group plans to buy a stake in its Twitter-like Weibo service.
So what: According to China Business News, Alibaba is considering a 15%-20% stake in SINA Weibo, valuing the microblogging service at roughly $3 billion. Although SINA's core advertising revenues continue to be weighed down by the weak economy, the reported interest from Alibaba reinforces investor optimism over Weibo's explosive growth potential.
Now what: While neither company has yet to confirm the talks, a deal seems beneficial to both sides. Specifically, Alibaba's stake in Weibo could drive significant traffic to its e-commerce sites and SINA could benefit from a much-needed increase in advertising revenue. While investors should never buy into stock based purely on buzz, SINA is certainly worth a closer look given today's news.
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Fool contributor Brian Pacampara has no positions in the stocks mentioned above. The Motley Fool has no positions in the stocks mentioned above. Motley Fool newsletter services recommend SINA . Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.