Weibo Corporation (WB): A Bull Case Theory

Core Thesis - Weibo Corporation is viewed as a peculiar investment case, blending stagnation with latent value, primarily due to its significant stake in INMYSHOW, which is undervalued on its books [2][4]. Financial Performance - As of January 13th, Weibo's share was trading at $10.99, with trailing and forward P/E ratios of 6.28 and 6.32 respectively [1]. - The stock has risen from $7.84 in summer 2024 to $10.14, and it pays an annual dividend of $0.82 [3]. - The business is trading around nine times after-tax operating earnings, indicating it is no longer exceptionally cheap on a cash flow basis [3]. Strategic Investments - Weibo holds a 26.57% stake in INMYSHOW, a Shanghai-listed entity valued at $10 billion, which is recorded on Weibo's books at just $300 million [4]. - This hidden value implies an intrinsic worth of approximately $16 per share, significantly above the current market price [4]. Investment Outlook - The juxtaposition of a stagnating operating business against a deeply undervalued strategic investment positions Weibo as a long-term asymmetric risk/reward opportunity [5]. - While short-term performance may disappoint due to ongoing operational challenges, the underlying net cash value provides a durable floor and potential for future revaluation if the stake in INMYSHOW is realized [5]. - Weibo represents a patient, value-oriented play, requiring investors to wait to capture the embedded upside [5].