Shares of SINA (NASDAQ:SINA) were down 17.1% as of 10:48 a.m. EST Thursday despite stronger-than-expected third-quarter 2019 results from the Chinese internet media company. Rather, the culprit appeared to be worrisome forward guidance that was simultaneously released this morning by Chinese microblogging platform Weibo (NASDAQ:WB), in which SINA owns a majority stake.
Regarding SINA's results, adjusted (non-GAAP) quarterly revenue climbed 1% year over year (or 5% at constant currency) to $558.8 million, translating to adjusted net income of $67 million, or $0.94 per share. Though we don't normally pay close attention to Wall Street's near-term demands, most analysts were modeling lower adjusted earnings of $0.59 per share on revenue of $555.7 million.
So why the decline today? Look no further than Weibo, which plunged as much as 18% early today after the so-called Twitter of China released its own third-quarter results.
That's not to say those results were bad; revenue climbed 2% to $467.8 million, as expected, while adjusted earnings of $0.77 per share narrowly beat estimates by $0.03 per share. But Weibo also told investors to expect fourth-quarter revenue to be flat to up 3% from the same year-ago period, the midpoint of which would mean a top line of roughly $489 million. By contrast, analysts' consensus models were assuming fourth-quarter revenue would arrive closer to the high end of Weibo's target range.
In the end, there's no denying that Weibo's relative strength has repeatedly propped up SINA's results for the past several years. Given Weibo's underwhelming outlook today, it should come as no surprise to see sister tech stock SINA responding in kind.