Why Weibo Corp. Shares Got Whacked

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 microblogging company Weibo  (NASDAQ: WB  ) sank 10% today after its quarterly results and outlook disappointed Wall Street.

So what: The stock has been sluggish since its April IPO on valuation worries, and today's first-quarter results -- net loss more than doubled to $47.4 million despite a 161% revenue spike -- coupled with downbeat guidance only reinforce those concerns. Weibo grew its monthly active users by 34%, to 143.8 million, but Mr. Market's response suggests the company isn't growing fast enough to justify its seemingly lofty price multiples.

Now what: Management now sees current-quarter revenue of $74 million to $76 million, below the Wall Street consensus of $78 million. "Weibo is already the largest platform in China for users to create and distribute content publicly," CEO Gaofei Wang said in a conference call with analysts. "Our core strategy in the coming few years is to take advantage of the rapid growth of China's mobile Internet user base and leverage the core attributes of our platform." Given Weibo's highly speculative nature and still-pricey valuation, however, conservative Fools would do well to remain on the sidelines.

Leaked: Apple's next smart device (warning, it may shock you)
Apple recent recruited a secret-development Dream Team to guarantee their newest smart device was kept hidden from the public for as long as possible. But the secret is out...and some early viewers are even claiming its everyday impact could trump the iPod, iPhone, AND the iPad. In fact, ABI Research predicts 485 million of these type of devices will be sold per year. But one small company makes this gadget possible. And their stock price has nearly unlimited room to run for early in-the-know investors. To be one of them, and see Apple's newest smart gizmo, just click here!


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

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.

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 2968615, ~/Articles/ArticleHandler.aspx, 10/1/2014 12:04:13 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...


Advertisement