Weibo Corporation (NASDAQ: WB) shares plunged on Thursday after China’s media regulators asked three major platforms to stop video and audio streaming services.
The platforms are said to be providing audio and video services without a license and broadcasting "politically related content inconsistent with state regulations." These three web portals including Microblog site Sina Weibo, news portal Ifeng.com and video streaming site ACFUN.
"The administration has ordered authorities in charge to take effective measures to shut down the websites' audio-visual services and make a thorough rectification, so to create a cleaner cyberspace," the State Administration of Press, Publication, Radio, Film and Television said in a statement.
Weibo shares dropped over 10 percent in the early trading in New York. It pared some of its losses later but was still trading 5.5 percent down. Sina Corp, who launched Weibo in 2009, also dropped as much as 4 percent.
Weibo, which is known as China’s Twitter, has been investing heavily in video contents and video streaming service to attract more users and advertisers. In May, The Beijing-based company reported better-than-expected first-quarter earnings due to strong advertising and marketing sales, sending the shares up more than 20 percent in one day.
The stock has gained more than 80 percent this year. Now Weibo has a market cap of 16.5 billion, surpassing Twitter.