In 2013, Sina's (NASDAQ:SINA) revenue soared 26%, thanks in large part to 190% revenue growth from its asset Weibo (NASDAQ:WB). For the last year, investors have patiently awaited an IPO of Weibo because of its growth. On Thursday, it occurred, and rallied 20% to a market cap of $4 billion. However, while investors call Weibo the Chinese Twitter (NYSE:TWTR), investors must now hope that it doesn't become the next Renren (NYSE:RENN).

Weibo appears to be a good value
There's no logical way to argue against Weibo's growth in its early years, or its valuation relative to peers like Twitter. Last year alone, Weibo's revenue grew 190%, to $188 million, and for 2014, its revenue is expected to reach $400 million. Weibo has been able to create this growth by monetizing its 144 monthly active users (MAUs), or 61.4 million daily active users (DAUs) via advertising and gaming.

Therefore, Weibo is growing significantly faster than Twitter, a company that grew 110% last year and is expected to grow 86% this year. Yet, in looking ahead, Weibo's current valuation implies a 10 times 2014 expected sales ratio, versus Twitter at 20 times forward sales. Therefore, Weibo looks rather attractive from a valuation point of view.

With that said, Sina's year-over-year revenue growth is going to drop significantly thanks to the IPO and divestment of Weibo. However, Sina did maintain the majority of its ownership, down to 58% from 77.6%. As a result, if Weibo shares soar, or appreciate to a level that matches that of Twitter, then Sina could become a very rich company, and have a lot of options available.

The next Renren is always possible
Sina's stock finished higher by nearly 7% on Thursday, following Weibo's IPO. Therefore, conventional wisdom implies that Sina will continue to be connected to Weibo with its stake in the company being so high. While Weibo's side-by-side comparison to Twitter suggests higher days ahead, there is always the possibility of a social media collapse -- or the second-coming of Renren.

In the three years following Renren's IPO, it has lost nearly 80% of its valuation, dropping from a valuation of more than $7 billion to just $1.25 billion today. This is a company that was heralded as China's version of Facebook, and if you visit the company's site, you'll see that the layout to Facebook is remarkably similar.

Prior to Renren's IPO, it reported 160 million registered users and 31 million monthly active users. In the full-year of 2010, it earned $76.5 million in revenue, growing 64% year over year. However, in its last quarter, revenue fell 29% and, looking ahead, the company is guiding for first quarter revenue to fall 40% over the year prior. Furthermore, its monthly unique logins have fallen hard, to just 45 million in the fourth quarter of 2013 from 56 million in the year prior.

Essentially, 160 million users were not enough to give Renren longevity, and today, it's on a fast-track status to becoming the next Myspace. Now, will Weibo follow this same pattern? Right now, it's impossible to tell. However, there are some alarming statistics.

Two scary statistics for longs
A recent report from South China Morning Post unveiled that, of Weibo's 208.7 million total accounts, 10.4 million created nearly 94% of the content. In other words, 5% of its users are responsible for nearly all of Weibo's value. In many ways, this implies that advertisements won't be highly successful, as fewer people are reading and engaging in content.

Then, for all the growth and impressive metrics of Weibo, it's worth noting that its daily active users actually fell 4% in its last quarter compared to the prior quarter. For a company that's in the midst of a growth stage, quarter-over-quarter declines should be non-existent; this should be a major concern for shareholders.

Final thoughts
While Weibo is cheap by social media standards, it's rather expensive relative to the rest of the market. Hence, the origin of its content, and failure to grow users, must worry investors if it can continue to grow long term.

This is a company that's directly tied to the amount of advertising dollars that it can earn. The two noted concerns create real questions as to whether Weibo can become the next Twitter, and if advertisers will keep spending money on the platform. Hopefully, last quarter was a fluke, and Weibo shares will soar higher and take Sina with it. However, for bullish investors, just remember -- there are a lot more Myspace and Renrens than Facebooks in this space.

Brian Nichols owns shares of Sina. The Motley Fool recommends Sina and Twitter. The Motley Fool owns shares of 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.