Yahoo Finance Why Weibo Shares Jumped 15% Today
What happened
Shares of Weibo (NASDAQ: WB) rose as much as 15.6% on Monday, following a strong second-quarter earnings report. As of 3:30 p.m. EDT, the Chinese social media company's stock had settled down to a 14.8% gain.
So what
Your average Wall Street analyst had been expecting Weibo to report earnings near $0.59 per share on revenue in the neighborhood of $429 million. The report exceeded both of these targets with earnings of $0.68 per share and $432 million in top-line sales.
Image source: Getty Images.
Now what
The company added 21 million monthly active users in the second quarter, landing at 486 million reasonably active accounts. In the earnings call, management noted that users are engaging with newsworthy topics and short-form videos, supporting both user growth and stable ad revenue per user. The company is aiming for roughly 8% year-over-year sales growth on a currency-neutral basis in the third quarter.
Weibo's stock is still trading 49% below its 52-week highs. Share prices could recover in a hurry if the U.S. reaches a trade deal with China, removing the darkest shadow looming over consumer-facing Chinese businesses like Weibo at the moment. I would advise against holding your breath until that day comes, though.
Anders Bylund has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Twitter. The Motley Fool recommends Weibo. The Motley Fool has a disclosure policy.
This article was originally published on Fool.com
