The sudden order affects not only Weibo, but also Hong Kong-based Phoenix Satellite Television Holdings Ltd.’s Internet video services in China, and VC-backed firm Acfund, according to a report from China Money Network.
Regulation of Chinese media is tightening ahead of a key meeting of the Chinese Communist Party in November, held every five years.
“Lam says that Chinese President Xi Jinping ” wants stability above all else in this sensitive period”, but that ultimately censorship could backfire”.
But Sina Weibo was among three companies named on Thursday as having broken the rules that require online video and audio services to be licensed. China keeps a close watch over the internet, deleting comments on social media it deems harmful and blocking popular foreign websites including Google and Facebook. The technology ministry said it forbids use of virtual private networks and leased lines to circumvent government filters and access banned websites overseas.
Shares of Weibo closed off 6.1% in NY, while those of Sina, its parent company, lost 4.8%. The company plans to fully cooperate with the relevant authorities. Among the three was microblogging site Sina Weibo, which lost more than $1bn in market capitalization in NY trading Thursday, the Financial Times reports. In February, Sina Weibo surpassed Twitter in market capitalization, at a valuation of $11.3bn.
In a statement on its Weibo account, AcFun promised to carry out a “comprehensive rectification” of its website management to create a “clear and bright online environment”.