Why SINA Corp. Stock Soared 65% in 2017
What happened
Shares of SINA Corp. (NASDAQ: SINA) jumped 65% in 2017, according to data from S&P Global Market Intelligence, as the Chinese internet media leader's quarterly reports consistently exceeded Wall Street's expectations.
That's not to say it was a completely smooth ride up for SINA investors. Keeping in mind SINA also climbed nearly 30% in 2016, its first big move of 2017 was a 12% single-day plunge in late February despite posting particularly strong fourth-quarter 2016 results.
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So what
But it didn't take long for SINA to recoup those early losses. To start, shares skyrocketed almost 30% in the month May on the heels of SINA's even better first-quarter 2017 announcement. That report was punctuated by accelerated revenue and user growth at SINA's Weibo (NASDAQ: WB) microblogging website, and an in-line performance from SINA's core media business in what was a seasonally slow period.
And though shares subsequently pulled back in June when SINA announced a partial distribution of its ownership in Weibo -- through which it reduced its equity stake in the site to 46% from 49%, but retained 72% of the company's voting power -- the climb resumed following SINA's strong Q2 results in August thanks again to the relative outperformance of Weibo.
Now what
More recently in November, the seesaw continued with shares dropping nearly 12% after SINA's third-quarter report handily beat Wall Street's expectations. Quarterly revenue climbed 62% year over year to $443.1 million, including 56% growth in advertising revenue driven by Weibo and its 376 million monthly active users. But this time, SINA also saw 98% growth in non-ad revenue driven by a combination of Weibo membership fees, live broadcasting products, and new revenue from SINA's burgeoning online finance business.
SINA chairman and CEO Charles Chao rightly said he was "pleased" with their performance, noting SINA had just set fresh records for both revenue and operating income.
As it stands, SINA's fourth-quarter report is slated for mid-February, and expectations are high with consensus estimates calling for revenue to climb nearly 55% to $481.3 million. But with both Weibo and SINA's namesake businesses firing on all cylinders, it won't surprise anyone if the company manages to exceed all expectations yet again.
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Steve Symington has no position in any of the stocks mentioned. The Motley Fool recommends Sina and Weibo. The Motley Fool has a disclosure policy.
