The deal is a convertible bond ($200mm) which converts into Sina stock at $65 per share. In addition to that, DST might also buy straight stock in SINA (equity). And the convertible bond likely has a small interest and could be converted into the stock at $65 per share at any time.
This deal will give Sina Weibo a $1 billion valuation.
Is it a better deal than what was reported in July? Then, Sina?s stock was $120 per share and the report said the valuation offered by DST was $5 billion. And now its stock is down to $52 per share, partially due to new rules that require microbloggers to verify their identities. Sina Weibo claimed 250 million users in November. Twitter, which claims 100 million active users, recently received a $300 million investment from the Saudi Prince Alwaleed bin Talal and his firm Kingdom Holding.
The interesting part is that DST is partially owned by Tencent Holdings Ltd. which holds 10.26 percent of its shares. Sina Weibo?s biggest competitor is Tencent Weibo, which claims a larger user base of 310 million registered users as of Nov 2011.
This article originally appeared on TechNode, a VentureBeat editorial partner.
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Companies: Digital Sky Technology, sina
People: Yuri Milner
Source: http://venturebeat.com/2011/12/22/dts-invest-sina/
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