Deutsche Bank Reiterates Buy on Sina (SINA) Despite Weibo Comment Suspension
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Price: $59.57 +1.29%
Rating Summary:
19 Buy, 3 Hold, 4 Sell
Rating Trend:
Down
Today's Overall Ratings:
Up: 11 | Down: 35 | New: 23
Rating Summary:
19 Buy, 3 Hold, 4 Sell
Rating Trend:
Down
Today's Overall Ratings:
Up: 11 | Down: 35 | New: 23
Trade SINA Now!
Deutsche Bank reiterated its Buy rating and $87.40 price target on SINA Corporation (NASDAQ: SINA) despite news that comments on Weibo were suspended for three days on request of the government.
The firm believes the incident suggests that 1) the govt is likely to adopt a stricter approach to content control on Weibo in the coming months, 2) the Chinese
govt remains supportive of Weibo development in China demonstrating a growing anxiety around content control of this new media format. According to CCTV, the govt shut down 16 websites for negligence in content control while criticizing Sina and Tencent Weibo for the same negligence, 3) the govt views Sina and Tencent Weibo as the most influential Weibo platforms in China.
Deutsche Banks notes the suspension is less about functionality and more about social stability, noting that a suspension of the comment feature doesn't keep Weibo users from exchanging views with each other. They can can continue to retweet original tweets with their views attached.
While the intensifying content controls are likely to lead to a hiccup in Weibo user growth, they don't expected mass user exodus given: substantial user exodus given: 1) there is no other online/offline media that offers customized content subscription in China and 2) users on Sina Weibo are more active than those on other Weibo platforms by a big margin.
For an analyst ratings summary and ratings history on SINA Corporation click here. For more ratings news on SINA Corporation click here.
Shares of SINA Corporation closed at $65.00 yesterday, with a 52 week range of $46.86-$147.12.
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The firm believes the incident suggests that 1) the govt is likely to adopt a stricter approach to content control on Weibo in the coming months, 2) the Chinese
govt remains supportive of Weibo development in China demonstrating a growing anxiety around content control of this new media format. According to CCTV, the govt shut down 16 websites for negligence in content control while criticizing Sina and Tencent Weibo for the same negligence, 3) the govt views Sina and Tencent Weibo as the most influential Weibo platforms in China.
Deutsche Banks notes the suspension is less about functionality and more about social stability, noting that a suspension of the comment feature doesn't keep Weibo users from exchanging views with each other. They can can continue to retweet original tweets with their views attached.
While the intensifying content controls are likely to lead to a hiccup in Weibo user growth, they don't expected mass user exodus given: substantial user exodus given: 1) there is no other online/offline media that offers customized content subscription in China and 2) users on Sina Weibo are more active than those on other Weibo platforms by a big margin.
For an analyst ratings summary and ratings history on SINA Corporation click here. For more ratings news on SINA Corporation click here.
Shares of SINA Corporation closed at $65.00 yesterday, with a 52 week range of $46.86-$147.12.
Join StreetInsider.com FREE and get immediately alerted when news breaks on your stocks and other market items - JOIN NOW
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