Online media giant Sina has announced its withdrawal from the US capital market and its full conversion into a financial holding company amidst worsening relations between China and America.
Sina chair Cao Guowei (曹国伟) said on 23 March that the company had withdrawn from the Nasdaq Stock Market and become “Sina Group Share Controlled Co., Ltd. (新浪集团控股有限公司), a private company jointly controlled by Cao and the company’s senior executives.
As of the close of trading on 23 March Sina’s stock price was USD$43.26, for a market capitalisation of USD$2.6 billion.
Cao said that the withdrawal of Sina was for the purpose of changing an “irrational capital structure” which saw Sina and its social media platform Sina Weibo both operate as listed companies.
Cao also said that Sina hoped to pursue more diversified development in future, and that the withdrawal would enable it to operate with greater flexibility.
Sina first listed on Nasdaq in 2000, becoming the first Chinese stock to do so via the variable interest entity (VIE) structure.
Analysts say the move could mark the start of a new wave of Chinese companies listed abroad opting to now “return home, amidst improvements to China’s own capital markets as well as worsening Sino-US tensions.
The move from Sina also comes during a push by Chinese authorities for increased adoption of the financial holding group form in order to expedite regulation and risk prevention.
In September 2020 China issued new regulations on financial holding companies, while the Chinese central bank indicated in December that they would be “the way of the future.”
In February of this year Chinese fintech giant Ant Group unveiled plans for its full conversion into a financial holding company while under heavy pressure from regulators that previously resulted in the shelving of its Hong Kong and Shanghai IPO.