Goldman Sachs has just downgraded Chinese portal Sina to Sell from Neutral, because the potential of its hugely popular Twitter clone Weibo is fully priced in.
Sina is a traditional portal but it also created and owns Sina Weibo, the most popular Twitter clone by far, which has seen an explosion of activity. Weibo has actually evolved into a much richer experience than Twitter.
Over the past year Sina’s stock price went from $40 to $140, largely because of Weibo, and Goldman’s report says that at current stock prices, Weibo’s implied valuation is $6 billion. Goldman writes that is “(in our view) rich”, perhaps the understatement of the year. Goldman values Weibo at $3.5 billion, which is reasonable.
In other words: this stock has had a great run, but the party’s over folks.
Photo: Google Finance