Weibo soars 48% on report that China's Twitter may go private

• Weibo shares surge as much as 48% on Tuesday following a Reuters report the Chinese blogging may be taken private.
• Weibo's chairman and an unnamed state firm are working on forming a consortium for the potential deal.
• The consortium is considering a price premium of 80% to 100% to buy out Weibo.
• See more stories on Insider's business page.

US-listed shares of Weibo nearly doubled early Tuesday following a report the Chinese blogging site is in talks to go private in a deal that could set a value of at least $20 billion on the company.

Charles Chao, Weibo's chairman, and a state investor are discussing a potential deal, according to Reuters, citing two unnamed sources. New Wave, Chao's holding company, is working with an unidentified Shanghai-based state firm to create a consortium for the deal, Reuters said, citing the sources as well as a separate person.

The consortium is considering a buyout offer of $90-$100 per Weibo share, which would represent a premium of 80%-100% to the $50 average price of the shares over the past month.

Weibo shares jumped as much as 48% to $80.50 in premarket trade then moved to a gain of 20%. Volume appeared heavy with more than 5 million shares traded compared with an average daily volume of around 1.1 million shares.

New Wave is the largest shareholder in the company often referred to as China's Twitter. A buyout deal could see major shareholder Alibaba Group exiting from its stake in Weibo, said the report.

Weibo's shares began trading in the US in April 2014 and reached a peak above $142 in February 2018.