China Cracks Down On Weibo; Chinese Social Media Stocks Tumble

Chinese regulators ordered Weibo Corp (ADR) (NASDAQ:WB) and other social media sites to shut down audio-visual services Wednesday.

The State Administration of Press, Publication, Radio, Film and Television said Weibo was operating without the proper license, publishing content not in-line with government regulations, and promoting negative comments.

The news sent Weibo shares down 11 percent in the pre-market session.

Other Chinese social media stocks quickly followed including SINA Corp (NASDAQ:SINA), which fell 7.6 percent, and Momo Inc (ADR) (NASDAQ:MOMO), down 4.4 percent.

Alibaba Group Holdings Ltd (NYSE:BABA) also nudged downward 0.8 percent. The e-commerce giant holds a major stake in Weibo.

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