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SINA Corporation Sends Letter to Shareholders Setting the Record Straight on the Value Created by the Current SINA Board and Management Team

  SINA Corporation Sends Letter to Shareholders Setting the Record Straight on the Value Created by

  the Current SINA Board and Management Team

  Questions Aristeia¨s Rhetoric on Governance Given its Record of Poor Corporate Behavior and

  History of Violating Federal Securities Law

  Urges Shareholders to Vote ^FOR ̄ the Election of Yichen Zhang and

  ^AGAINST ̄ the Election of Each of Aristeia¨s Nominees on the WHITE Proxy Card TODAY

  BEIJING, Oct. 10, 2017 C SINA Corporation (^SINA ̄ or the ^Company ̄) (NASDAQ: SINA), a leading online

  media company serving China and the global Chinese communities, today announced that the SINA

  Board of Directors has sent a letter to shareholders in connection with the Company¨s upcoming 2017

  Annual General Meeting of Shareholders (the ^Annual General Meeting ̄) to be held on November 3,

  2017. SINA shareholders of record at the close of business on September 20, 2017 are entitled to attend

  and vote at the Annual General Meeting. The proxy statement and other important information related

  to the Annual General Meeting can be found on the Company¨s website at

  The SINA Board of Directors unanimously recommends that shareholders vote ^FOR ̄ Yichen Zhang and

  vote ^AGAINST ̄ each of Aristeia¨s nominees by signing, dating and returning the WHITE proxy card


  The full text of the letter follows:







  October 10, 2017

  Dear Fellow Shareholders,

  The SINA 2017 Annual General Meeting to be held on November 3, 2017 is rapidly approaching.

  Your Board of Directors unanimously recommends that you vote ^FOR ̄ the reelection of

  Yichen Zhang on the WHITE proxy card TODAY.

  We have delivered C and continue to deliver C value to all of SINA¨s shareholders. Our track

  record of solid performance across key metrics, combined with the strength of Weibo as a

  highly-synergistic platform within SINA¨s digital media network, is driving outperformance of

  SINA¨s stock compared to a diversified peer set and the broader market over the last three


  Now that progress is at risk: Aristeia Capital, L.L.C., a single shareholder that claims to own

  approximately 4.2% 1 of SINA¨s shares, is seeking outsized influence over your Board and our

  strategy by waging a proxy contest that seeks to implement value destructive ideas and

  proposals. To date, Aristeia¨s ideas include tax-inefficient transactions and likely impossible

  merger ideas. Do not risk jeopardizing our momentum and the substantial returns that you

  continue to enjoy. We ask for your support in this important election so that we can continue to

  deliver long-term sustainable value to all of SINA¨s shareholders.

  In recent weeks, Aristeia has resorted to personal attacks and false claims. Most recently,

  Aristeia has claimed that the interests of SINA¨s Chairman and CEO, Charles Chao, are not

  aligned with all SINA shareholders. Nothing is further from the truth. Mr. Chao and the Board

  collectively own approximately 12.8% 1 of SINA shares, approximately 200% 1 more than Aristeia¨s

  ownership in the Company and have a proven record of value creation, making them clearly

  aligned with the interests of all shareholders. In short, Mr. Chao and the Board will only gain if

  all SINA shareholders gain.

  In fact, since Mr. Chao¨s purchase of a significant stake in SINA in June 2015, when he personally

  purchased SINA¨s shares at an above-market price, SINA¨s share price has appreciated by

  approximately 210%. 2 Mr. Chao took this action to reinforce investors¨ confidence in SINA¨s

  long-term strategy, to further align the Board and management with the interests of our

  shareholders and to ensure executive decision making by the management team is fully aligned

  with shareholders¨ interests.

  Instead of believing in Mr. Chao¨s demonstrated and continued support of the value potential of

  the Company, Aristeia sold its shares of SINA in June 2015 and continued regularly selling a

  significant amount of equity related instruments of SINA throughout 2015 and 2016. Aristeia

  thereby missed the opportunity to derive value from the millions of dollars in profits your

  Board delivered over the next two years. The SINA Board is not accountable for Aristeia¨s

  hindsight regrets resulting from its short-term trading strategy and lack of long-term vision.

  Furthermore, Aristeia is pressuring shareholders into supporting its proposals by talking out of

  `both sides of its mouth.¨ Aristeia criticizes the Board for its ownership position in SINA, while at

  the same time arguing that Mr. Chao¨s significant ownership is inappropriate. The fact is, your

  Board members, other than Mr. Chao, have ownership positions resulting from normal course

  compensation, just as many other public company Board members do around the world.

  Aristeia¨s contradictory statements and rhetoric are highly misleading. We are writing to set the

  record straight about the significant value that the current SINA Board and management team

  are creating and to underscore the growth prospects of SINA, which continue to be robust and

  executed on by the Company.

  1 Based on Aristeia¨s statement on September 27, 2017 and company data on September 15, 2017.

  2 Based on SINA¨s closing share price on May 29, 2015 and October 6, 2017. Source: Nasdaq.

  Fact #1: SINA Has Significantly Outperformed Its Peers and the Market Index Since 2014 3

  Fact #2: Aristeia Has Consistently Shown Poor Governance, Including Prior SEC Violations

  It is time for our shareholders to know the extent of Aristeia¨s hypocrisy. Aristeia repeatedly

  attacks SINA for its corporate governance practices, and yet, on numerous occasions, Aristeia¨s

  poor corporate governance behavior has been the exact opposite of its rhetoric.

  Aristeia nominated Brett Krause who has a conflict of interest as he is currently an investor in

  Inke ( 啌人), which primarily operates in business areas that SINA, Weibo and certain of the

  Company¨s investees cover. In its letter dated October 5, 2017, Aristeia admitted that with,

  ^Brett Krause¨s involvement with, and knowledge of, Inke ´ He has committed that if elected to

  SINA¨s Board, he will take necessary steps to ensure that he has no conflict of interest related to

  the Inke investment. ̄ How can this nominee be trusted in the SINA Boardroom when he has a

  clear conflict of interest with a direct investment in SINA¨s competitor?

  Aristeia has delayed information about and denied access to its director nominees. Aristeia

  has withheld basic requests for information on its nominees, beginning with providing responses

  to the Company¨s standard director nominee questionnaires. SINA provided Aristeia a deadline

  of August 31, 2017 for completed questionnaires; however, Aristeia did not return them until

  nearly two weeks later on September 11, 2017. If Aristeia was truly eager to cooperate with

  SINA, why did Aristeia intentionally delay completing and returning the director questionnaires,

  which would allow SINA to properly evaluate and review each of Aristeia¨s nominees?

  Additionally, since September 13, 2017, Aristeia has refused to make either of its two director

  nominees available for interviews by representatives of the SINA Board. What is Aristeia trying

  to hide?

  3 Based on mean of peers: FB, AMZN, GOOG, BABA, BIDU, SOHU, WUBA, CTRP, JD, ATHM, VIPS, SFUN and FENG. Market data as

  of October 9, 2017. Source: Bloomberg.

  Aristeia has repeatedly violated Federal Securities Laws, resulting in censure and penalties by

  the SEC. During the first half of 2008 on four separate occasions, Aristeia violated Rule 105 of

  Regulation M of the Exchange Act. As disclosed in its Cease-and-Desist Order filed on May 2,

  2011 4 , the SEC determined that Aristeia bought offered shares from an underwriter or broker

  dealer participating in a follow-on public offering, after having sold short the same securities

  during the restricted period. The result: Aristeia¨s ill-begotten gains of approximately US$1.22


  In its Cease-and-Desist Order, the SEC censured Aristeia¨s actions C which were not admitted or

  denied by Aristeia C and ordered Aristeia to pay approximately US$1.76 million, which payment

  included a civil penalty, prejudgment interest and a disgorgement that equaled the exact

  amount of Aristeia¨s illegally obtained profits. Given its Federal Securities Law violations, how

  can any of Aristeia¨s claims be trusted? And given Aristeia¨s poor governance, how can its

  unqualified director nominees legitimately serve on the SINA Board to represent the interests of

  all shareholders?

  Fact #3: Critical Synergies Drive Compelling Rationale for Weibo to Remain an Integral Part of

  SINA Group

  The synergies between SINA and Weibo are compelling and benefit both companies. SINA and

  Weibo have successfully shared services across data, management, talent pool, capital

  resources and intellectual property that each company can leverage to enhance value and

  advance its respective strategy. For example, the data and IP sharing with Weibo has

  strengthened targeted advertising and content, making it vital in SINA¨s shift to mobile ads, and

  has been accelerating the growth of SINA¨s Fintech businesses by driving significant user traffic.

  Conversely, Weibo continues to benefit from SINA¨s resources in critical areas including

  leadership, engineering talent and capital as Weibo expands. The operating synergies between

  SINA and Weibo directly contribute to Weibo¨s value generating ability, and we believe these

  efficiencies create value that would not otherwise be achieved on a standalone basis.

  We are excited by the opportunities ahead for the continued growth of Weibo as part of SINA¨s

  digital media network and how such opportunities will continue to create value for all of SINA¨s

  shareholders. We expect SINA will strengthen its core platform and improve performance, while

  simultaneously continuing to advance Weibo¨s strategy and deliver strong results. This outcome

  is a clear win for all of our shareholders as they continue to participate in SINA¨s upside since

  Weibo¨s IPO in April 2014.

  Fact #4: The SINA Board Is Independent and Has Built a Foundation for Future Success

  The SINA Board is steadfast in its commitment to acting in the best interests of all SINA

  shareholders as fiduciaries appointed to help protect and create shareholder value. Your Board

  also understands the importance of independence in establishing a healthy, functioning Board

  to hold management accountable for the execution of SINA¨s strategy and ensure that the

  Company continues to effectively adapt to the evolving market. We therefore must set the

  record straight: Each of your four independent Board members, Ter Fung Tsao, Yan Wang, Song-

  Yi Zhang and Yichen Zhang, was appointed to the SINA Board prior to Mr. Chao¨s becoming CEO

  of SINA and is independent of Mr. Chao. Your Board members, including Mr. Chao, were

  selected due to their diverse experience and qualifications and bring unique perspectives to the

  decision-making process.

  4 Aristeia Capital, LLC, Exchange Act Rel. No. 34-64374. May 2, 2011.

  This independence and experience resulted in your current Board¨s direct responsibility for

  many of SINA¨s greatest successes, including the launch and enormous success of Weibo. We

  developed and executed a long-term vision to fully incubate Weibo within SINA, identifying

  key investments that have supported Weibo¨s infrastructure and further contributed to its

  tremendous growth and outperformance. Our strategy, management and oversight of Weibo

  until Weibo¨s IPO have also created an opportunity for SINA¨s shareholders to benefit greatly

  from Weibo¨s growth through SINA¨s approximately 123% share price appreciation since

  Weibo¨s IPO and our distribution of Weibo shares. 5

  Fact #5: SINA Has Delivered Significant Returns for All Our Shareholders

  SINA has already been executing several of Aristeia¨s proposed ideas, including repurchasing

  US$311 million out of the US$500 million share repurchase plan launched in 2014, which is

  active until mid-2018 and its ongoing, opportunistic distributions of Weibo shares C but we are

  doing so in a measured and responsible manner. The Board regularly assesses the best means by

  which to return capital to all of its shareholders, carefully considering factors affecting our

  heavily-regulated sector in China and the tax implications for shareholders. SINA has returned

  approximately US$1.7 billion of capital to security holders since 2014, which is the highest

  amount for China-based internet and technology companies listed in the United States. Further,

  we believe that Aristeia¨s other major proposals are short-term-focused, value-destructive or

  simply not feasible.


  5 Based on SINA¨s closing share price on April 17, 2014 and October 6, 2017. Source: Nasdaq.

  6 CEO¨s ownership of SINA is as of September 15, 2017.

  7 Value of 2016 distribution of Weibo shares is based on total number of distributed shares (7,088,116) multiplied by Weibo¨s

  adjusted market close on October 14, 2016 ($53.08).

  8 SINA announced the distribution of Weibo shares on May 26, 2017. The value of 2017 distribution of Weibo shares is based on

  total number of distributed shares (7,142,148) multiplied by Weibo¨s adjusted market close on July 10, 2017 ($68.76).

  9 Total value of Weibo share distribution based on total shares distributed (14,230,264) multiplied by Weibo¨s closing price on

  October 6, 2017.

  Fact #6: SINA¨s Discount Rate to Net Asset Value Is In-Line with Holdco Peer Companies

  A holding company¨s discount rate to net asset value (NAV) tends to be highly proportional to

  the amount of total free cash flow generated from the portfolio holdings and returned to the

  parent company. As Weibo is still in the phase of high growth, a large portion of Weibo¨s free

  cash flow is and will be reinvested back into the business.

  The market recognizes Weibo¨s high growth and the capital needed to continue fueling that

  growth. Based on an analysis of a selected group of listed holding companies with listed

  subsidiaries operating in China, with data sourced from third-party financial institutions as well

  as SINA¨s internal analysis, SINA¨s NAV discount rate of 36.0% 10 is in line with the peer average

  of 36.3%. 11 As Weibo continues to achieve a high growth rate, we will continue to reinvest in

  Weibo¨s business as we believe this provides the highest return and value to our shareholders.



  The SINA Board unanimously urges you to vote ^AGAINST ̄ each of Aristeia¨s nominees on the

  WHITE proxy card and to discard any blue proxy card or other proxy materials you may receive

  from Aristeia. If you have already returned a blue proxy card, you can change your vote by

  signing, dating and returning a WHITE proxy card TODAY. Only your latest dated proxy card

  will be counted.

  Instead, we trust that you want us to implement strategies and programs that are calculated to

  sustain our long-term performance without undue risk. Now is the time for SINA to continue

  building momentum and prevent anything from derailing the work that is delivering results for

  all SINA shareholders. If that is indeed what you desire, we encourage you to vote ^FOR ̄ Yichen

  Zhang and ^AGAINST ̄ each of Aristeia¨s nominees TODAY by signing and dating the WHITE

  proxy card and returning it in the postage-paid envelope provided.

  We thank you for your continued support.


  Charles Chao

  Chairman of the Board and CEO

  Ter Fung Tsao

  Independent Director

  Yan Wang

  Independent Director

  Song-Yi Zhang

  Independent Director

  Yichen Zhang

  Independent Director

  10 Data source: company data and 3 rd party institution research reports, incl. Citi, Macquarie, CICC, JP Morgan and Goldman


  11 Data source: company data and 3 rd party institution research reports, incl. BAML, JP Morgan, Goldman Sachs and CICC.

  Your Vote Is Important, No Matter How Many or How Few Shares You Own!

  If you have questions about how to vote your shares, please contact:


  Shareholders may call toll-free (from the United States and Canada): 877-750-5834

  International shareholders may call: +1-412-232-3651

  Banks and brokers (call collect): 212-750-5833

  Please visit for more information.

  About SINA

  We are an online media company serving China and the global Chinese communities. Our digital media

  network of (portal), (mobile portal), SINA Mobile Apps and (social media)

  enable Internet users to access professional media and user generated content in multi-media formats

  from the web and mobile devices and share their interests to friends and acquaintances. offers distinct and targeted professional content on each of its region-specific websites and a

  full range of complementary offerings. and SINA Mobile Apps provide news information,

  professional and entertainment content from customized for mobile users in WAP (mobile

  browser) and mobile application format. Weibo is a leading social media platform for people to create,

  distribute and discover Chinese-language content. Based on an open platform architecture, Weibo

  allows users to create and post feeds and attach multi-media content, as well as access a wide range of

  organically and third-party developed applications, such as online games.

  Through these properties and other product lines, we offer an array of online media and social media

  services to our users to create a rich canvas for businesses and advertisers to effectively connect and

  engage with their targeted audiences.

  Safe Harbor Statement

  This communication contains forward-looking statements that relate to, among other things, SINA¨s

  expected performance and SINA¨s strategic and operational plans. SINA may also make forward-looking

  statements in the Company¨s periodic reports to the U.S. Securities and Exchange Commission (the

  ^SEC ̄), in its annual report to shareholders, in press releases and other written materials and in oral

  statements made by its officers, directors or employees to third parties. Statements that are not

  historical facts, including statements about the Company¨s beliefs and expectations, are forward-looking

  statements. These forward-looking statements can be identified by terminology such as ^will, ̄

  ^expects, ̄ ^anticipates, ̄ ^future, ̄ ^intends, ̄ ^plans, ̄ ^believes, ̄ ^confidence, ̄ ^estimates ̄ and similar

  statements. Forward-looking statements involve inherent risks and uncertainties. A number of

  important factors could cause actual results to differ materially from those contained in any forward-

  looking statement. Potential risks and uncertainties include, but are not limited to, failure to meet

  internal or external expectations of future performance given the rapidly evolving markets; condition of

  the global financial and credit market; the uncertain regulatory landscape in China; fluctuations in the

  Company¨s quarterly operating results; the Company¨s reliance on online advertising sales and value-

  added services for a majority of its revenues; failure to successfully develop, introduce, drive adoption

  of or monetize new features and products; failure to enter and develop the small and medium

  enterprise market by the Company or through cooperation with other parties; failure to successfully

  integrate acquired businesses; risks associated with the Company¨s investments, including equity pick-

  up and impairment; and failure to compete successfully against new entrants and established industry

  competitors. Further information regarding these and other risks is included in SINA¨s annual report on

  Form 20-F for the year ended December 31, 2016 and its other filings with the SEC. Past performance is

  not necessarily indicative of future results. Given these uncertainties, you should not place undue

  reliance on these forward-looking statements. The information in this communication is provided only

  as of the date hereof, and SINA assumes no obligation to update its forward-looking statements in this

  communication or elsewhere, except as required by law.


  Investor Relations

  SINA Corporation

  Phone: 8610-5898 3336


  Larry Miller / Scott Winter

  Innisfree M&A Incorporated

  Phone: 212-750-5833


  Ed Trissel / Nick Lamplough

  Joele Frank, Wilkinson Brimmer Katcher

  Phone: 212-355-4449


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