Weibo Fair Value Estimate of US$15

From Morningstar's Yue Yao, in his May 11th note on Weibo:

"... we have a  downbeat view for Weibo's long-term outlook for three reasons: First, the content censorship imposed by the Chinese government restricts the flows of information on  Weibo platform. Secondly, Weibo's user base is  geographically limited to China, so user growth could reach saturation earlier than Twitter; Finally, we believe the display  ads on Weibo are less accurate and of higher volume, which lead to an inferior user experience."

Here's an analyst who doesn't pussyfoot around the censorship issue. I don't think censorship is a big deal for most users, frankly, but it's a balancing act for the government -- they don't want to kill Weibo completely. As far as user experience goes, most Chinese love clutter.

Weibo will report earnings tomorrow (May 21); it'll be interesting to see how much ad revenue they've grown and how much of it comes from Alibaba alone. 

Core Philosophical Differences

From Piper Jaffray's Gene Munster, in his May 12th note on Weibo ("overweight," $25 price target):

“Currently, Chinese Internet users cannot access Facebook or Twitter in China. We note that neither Facebook nor Twitter have been available in China for the life of Weibo, and we believe this market opportunity is a core reason for the popularity of Weibo. While there have been media reports about Facebook’s interest to enter China (less so for Twitter), we believe that there may be some core philosophical differences between how the Chinese government would like social media to function and the overall openness of either Facebook or Twitter. As a result, we believe it is unlikely that either Facebook or Twitter become available in China in the next two to three years.”

Or in the next twenty or thirty years. (If anyone has the Goldman Sachs note on Weibo, I'd appreciate it if you could email it to me.)