Why SINA Shares Surged

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.

Interested in more info onSINA?Add it to your watchlist.

Read/Post Comments (0) | Recommend This Article (2)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

Be the first one to comment on this article.

DocumentId: 2119907, ~/Articles/ArticleHandler.aspx, 7/26/2014 11:11:15 AM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...

TREND TRACKER: Get Rich When the Web Goes Dark

It's time to say "goodbye" to your Internet! One bleeding-edge technology is about to put the World Wide Web to bed. And if you act right away, it could make you wildly rich. Experts are calling it the single largest business opportunity in the history of capitalism… The Economist is calling it "transformative"... but you'll probably just call it "how I made my millions." Big money is already on the move. Don't be too late to the party – find out the 1 stock to own when the Web goes dark.