Chinese internet companies Sina and Sogou quit Wall Street as tensions rise

Business & Technology

Weibo owner Sina and search firm Sogou have announced they will go private and leave the Nasdaq and New York Stock Exchange, respectively. They are joining a collection of Chinese companies determined to rely less on U.S. markets as political tensions rise.

a blank sina weibo post cutout at a booth
The booth of Sina Weibo is pictured at the Beijing International Cultural and Creative Industry Expo, in Beijing, China, May 29, 2019. REUTERS/Stringer

Sina, the owner of social media site Weibo, and web search firm Sogou are the latest Chinese companies joining a trend of companies relying less on Wall Street. Sina announced yesterday that it would leave the Nasdaq in a $2.59 billion deal with Beijing-based New Wave Holdings, and Sogou said today that its shareholder Tencent “would take the web search firm private in a $3.5 billion deal,” Reuters reports.

“Since November, eight Chinese companies that originally went public in New York have added listings in Hong Kong, and the pace has been picking up,” the Wall Street Journal reports. These companies hedging their bets range from ecommerce giants Alibaba and JD.com to Yum China, the operator of thousands of Pizza Huts and KFCs in mainland China.

  • Sina and Sogou have not announced plans to re-list anywhere, but they likely have one reason in common with those other companies for relying less on Wall Street: the increasingly tense U.S.-China relationship and heightened scrutiny of Chinese companies.
  • For context, see SupChina: The Hong Kong Stock Exchange’s half-trillion-dollar opportunity.

Details on the Sina and Sogou deals:

  • Sina “went public in 2000 on Nasdaq during the dotcom boom, alongside other pioneers from China’s technology sector,” per Bloomberg, and it agreed to go private now after its CEO Charles Chao (曹国伟 Cáo Guówěi) increased the go-private offer of his New Wave Holdings from $41 a share in July to $43.30 a share.
  • Sina’s flagship product, Weibo, was launched in 2009 and is often compared to Twitter, but has both a larger user base and many more innovative features. Weibo has recently reported a loss in revenue as advertising took a hit with COVID-19, but profits and monthly active users have both increased.
  • Sogou, which debuted on the New York Stock Exchange in 2017, will now become an “indirect wholly-owned subsidiary of Tencent,” the company said today.
  • Sohu — if you can keep all your Chinese internet companies starting with “S” straight — was the original owner of Sogou, but with this deal, “Sohu will no longer have any beneficial ownership interest in Sogou,” AFP reports.