Valuation judgments are never that simple and it is correct that some of the naturally greater uncertainties in the Chinese market should be reflected in the valuation. However, some investors do see value.

Alibaba -- part-owned by Yahoo! (YHOO) and poised for its own initial public offering in the U.S. -- acquired an 18% stake in Sina Weibo for $568 million last year, with a $3.2 billion implied value, and has the option to increase its position to 30% before the IPO. Are they taking this up? Yes they are. They see much more value than just over $3 billion.

Sina, with $54 million in income before tax in fiscal year 2013, is not much without Weibo. Just look how they talked about prospects for 2014 in the quote below. For Sina it's really all about Weibo.

"As we enter 2014, we will continue to focus on growing Weibo's user base and user engagement through product innovation, as well as seizing opportunities to enable us for long term growth."

So at the current $4.5 billion market capitalization what should an investor think? Sina is undoubtedly highly volatile and suffers from speculative tendencies -- as shown by the volatility of the share over the last year.  

Clearly -- as with the big picture concept of social media -- the opportunity for further monetization of their growing user base exists over the next few years. The call Alibaba has made to raise their stake shows optimism about the valuation by an entity that knows the Chinese internet market very well. This is a strong signal for both growth and value investors.

At the time of publication, the author held shares of SINA but held no positions in any of the other stocks mentioned.

This article represents the opinion of a contributor and not necessarily that of TheStreet or its editorial staff.

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