BEIJING, Oct. 10, 2017 /PRNewswire/ -- 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
http://corp.sina.com.cn/eng/AGM/.
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
TODAY.
The full text of the letter follows:
SINA URGES SHAREHOLDERS TO VOTE "FOR" SINA DIRECTOR YICHEN
ZHANG AND "AGAINST" ARISTEIA'S NOMINEES, BRETT KRAUSE AND THOMAS
MANNING, ON THE WHITE PROXY CARD TODAY
ARISTEIA'S HALF-TRUTHS AND MISINFORMATION PURPOSELY CONCEAL
THE FACTS, INCLUDING ITS VALUE-DESTRUCTIVE IDEAS, POOR GOVERNANCE
PRACTICES AND FEDERAL SECURITIES LAW VIOLATIONS
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 – and continue to deliver – 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 years.
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.
Fact #1: SINA Has Significantly Outperformed Its Peers and
the Market Index Since 20143
[See included image.]
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 (映客), 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?
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,
20114, 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
million.
In its Cease-and-Desist Order, the SEC censured Aristeia's
actions – which were not admitted or denied by Aristeia – 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.
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 – 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.
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% is in line
with the peer average of 36.3%.10 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.
PROTECT YOUR INVESTMENT AND FUTURE UPSIDE – VOTE "FOR" SINA
NOMINEE, YICHEN ZHANG
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.
Sincerely,
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
|
|
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:
INNISFREE M&A
INCORPORATED
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
http://corp.sina.com.cn/eng/AGM/ for more
information.
|
About SINA
We are an online media company serving China and the global Chinese communities. Our
digital media network of SINA.com (portal), SINA.cn (mobile
portal), SINA Mobile Apps and Weibo.com (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.
SINA.com offers distinct and targeted professional content on
each of its region-specific websites and a full range of
complementary offerings. SINA.cn and SINA Mobile Apps provide news
information, professional and entertainment content from SINA.com
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.
Contacts
Investor Relations
SINA Corporation
Phone: 8610-5898 3336
Email: ir@staff.SINA.com.cn
Larry Miller / Scott Winter
Innisfree M&A Incorporated
Phone: 212-750-5833
Media
Ed Trissel / Nick Lamplough
Joele Frank, Wilkinson Brimmer
Katcher
Phone: 212-355-4449
______________________________
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.
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.
4 Aristeia Capital, LLC, Exchange Act Rel. No. 34-64374.
May 2, 2011.
http://www.sec.gov/litigation/admin/2011/34-64374.pdf.
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.
10 Data source: company data and 3rd party institution
research reports, incl. Citi, Macquarie, CICC, JP Morgan and
Goldman Sachs.
11 Data source: company data and 3rd party institution
research reports, incl. BAML, JP Morgan, Goldman Sachs and
CICC.
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