Weibo shares plunged after facing delisting scare

Weibo Corporation has been added to SEC’s “Provisional list of issuers identified under the HFCAA”, following its Chinese peers Beigene, Yum China, Zai Lab, ACM Research, and HUTCHMED Ltd, which were added to the list on March 8. Weibo has since seen its shares slump, “as much as 10%” according to a Bloomberg report. 

The SEC, or Securities and Exchange Commission, has been putting Chinese companies on watchlist based on HFCAA, or the Holding Foreign Companies Accountable Act. The act grants SEC with authority to “review company audits for three consecutive years,” otherwise they can be delisted.

Weibo has been given a three-week period to “submit evidence disputing identification”, by April 13.

A screenshot of SEC’s provisional list on March 24, from www.sec.gov/hfcaa

As a Twitter-like platform, Weibo is considered one of the most popular social networking platforms in China. Weibo has recently come under fire for forcibly displaying users’ IP addresses in an attempt to “cut down misinformation”. The function is currently in testing, and displays the most recent IP address of users in their profile pages.

Weibo users became upset over the fact that their IP addresses have been forcibly made public, while those of verified accounts remain hidden. As Weibo users point out, Cao Guowei, the CEO of Sina, which is the owner of Weibo, does not have his IP address displayed on his profile page.

Photo by Solen Feyissa on Unsplash / modified from original