Weibo (WB) stock up amid rumors of going private. Time to buy?

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 Weibo (WB) stock up amid rumors of going private. Time to buy?
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Stocks of social media app Weibo Corp (WB:US, NASDAQ:WB) soared 13 per cent in the premarket trading hours on Tuesday, July 6, amid reports that the company is in talks to go private at a valuation of nearly US$ 20 billion.

As per reports, this speculative deal might provide a premium in the range of 80 to 100 per cent. Reports even claimed that the company’s management and a state investor are looking to oust Alibaba Group Holding Ltd, which is one of the major shareholders in the firm.

However, Weibo has denied the above speculations in its recent press release.  

In the wake of the above development, the company saw 6.3 million of its shares change hands at the market on Tuesday, up from its 10-day volume of less than a million shares.

Let us have a look at the social media stock’s fundamentals and price growth.

Weibo Corp (WB:US, NASDAQ:WB)

The microblogging stock closed at US$ 54.31 apiece on Monday, July 5. Its annual growth was 61 per cent, surpassing the NASDAQ Composite Index that yielded 12.30 per cent relatively.

The stock may cross its one-year high of US$ 63.55 apiece (February 16) on the back of a higher premium news report. The advertising and social marketing firm’s common shares have already been marching in a bull market, with a year-to-date rise of over 32 per cent.

The interactive stock offers earnings per share (EPS) of US$ 1.75, up against Twitter Inc’s (TWTR:US, NYSE:TWTR) EPS of -US$ 1.34. The stock has a return on equity of 11.67 per cent.

Weibo’s one-year stock performance against moving average multiple and rising volume. (Source: Refinitiv)

At the previous closing, the share price trajectory was up 16 per cent against the 200-day moving average and single-digitally up vis-à-vis its short-term simple moving average multiple. The stock has witnessed a rise in buying in the last one week.

The Chinese company reported a top line of US$ 458.9 million in the first quarter of 2021, a rise of 42 per cent year-over-year (YoY).

Weibo registered revenue of US$ 390 million from its advertising and marketing segment, a sharp jump of 42 per cent YoY. Its bottom line was US$ 108.6 million for the quarter, an increase of over US$ 50 million against Q1 2020.

For the second quarter of 2021, the social media firm expects a surge in revenue in the range of 25 per cent to 30 per cent on a YoY basis.

The above constitutes a preliminary view and any interest in stocks should be evaluated further from investment point of view.


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