This Day On The Street
Continue to site right-arrow
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
TheStreet Open House

Maxim Raises China's Sina Despite Growing Pains

NEW YORK ( TheStreet) -- Sina Corp. (SINA - Get Report), operator of China's popular Weibo micro-blogging site, remains a work in progress yet a company with enough of a foothold in the country's social media market to warrant patient investors, said Maxim Group analyst Echo He.

Maxim's He, who has long rated Sina a "sell," upped her rating in the shares to "hold" on Friday, citing the potential for revenue growth at the company's social media platform most frequently identified as China's version of Twitter.

Yet not all is go-go growth at Sina, says He. Weibo is certainly popular but traffic has begun to mature, a fancy way of saying it's not growing. It's hit a plateau. He referred to Weibo's current predicament as suffering from "stale" traffic growth.

"Traffic is one of the risks there," the New York-based analyst said over the phone. "If I have a 'hold,' there's got to be something I'm concerned about so at the end of the day, traffic is what I'm concerned about."

Sina was dropping 1.5% to $55.74 in afternoon trading.

But He also pointed out that on the flipside, Weibo, launched in 2009, is still a relatively young business that has just started to really grow revenue. So as long as they can keep user activity going and find new and compelling products to add to the service, its revenue upside should remain promising.

"Its revenue side is far away from mature," said He.

The Maxim equity analyst explained that her optimism about Weibo's revenue growth was bolstered by the Alibaba deal struck in late April with Sina to invest $586 million for 18% of Weibo's equity. The companies predict that their collaboration could yield about $380 million in advertising and commercial revenue for Weibo over the next three years.

With Alibaba's involvement, He estimates that Weibo's ad revenue could grow by 91% to $261 million or 33% of revenue in 2014 and by 52% to $396 million or 40% total revenue in 2015 from a year ago. She's modeling $137 million in ad revenue generation from Weibo this year, with 10% to 15% of that attributable to the Alibaba collaboration.

Written by Andrea Tse in New York

>To contact the writer of this article, click here: Andrea Tse.

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Try it NOW
Only $9.95
Try it NOW
14-Days Free
Try it NOW

Check Out Our Best Services for Investors

Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
Try it NOW
Try it NOW
Try it NOW
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
SINA $32.33 0.00%
YHOO $44.73 -0.49%
AAPL $125.70 -0.53%
FB $83.20 0.00%
GOOG $549.83 -0.40%


DOW 17,976.31 +263.65 1.49%
S&P 500 2,086.24 +25.22 1.22%
NASDAQ 4,947.4410 +56.2220 1.15%

Partners Compare Online Brokers

Free Reports

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs