Sina Corporation: Significant Fair Value Uplift in Section 238 Appraisal

Background and Facts

A Nasdaq-listed company, Sina’s primary asset was a controlling interest in Weibo Corporation (“Weibo”), a microblogging platform (known as the Chinese Twitter), also listed on the NASDAQ, together with long-term investments, the most significant of which at the time of the merger was TuSimple Holdings Inc. (“TuSimple”), an autonomous trucking start-up which was privately held at the time of the merger but which went through an IPO shortly after. Sina also had an online media content business and a micro-lending business (referred to as its standalone business).

After a prolonged period of declining market price for both Sina and Weibo, on 6 July 2020 a consortium led by New Wave MMXV (“New Wave”) a company controlled by Sina’s CEO and chairman, which had 61.6% of the company’s voting power, offered $41 per share to take Sina private. After period of negotiation, on 28 September 2020, Sina’s special committee accepted New Wave’s best and final offer of $43.40 and at an EGM held on 23 December 2020 (which was the valuation date for the purposes of the appraisal), the merger was approved and closed on 21 March 2021.

Expert Evidence

At the trial in February and March 2025, Sina’s valuation expert opined that the fair value of the dissenters as at the valuation date was US$40.15/share. This was based on his use of a blended approach: 45% weighting on the ATMP (US$37.20), 10% weighting on merger price (US$43.30), and a 45% weighting on a SOTP analysis (US$42.41). His SOTP analysis comprised:

• DCF valuations of Weibo and Sina standalone;
• TuSimple valued based on its most recent funding found before the valuation date;
• Long-term investments valued on market prices with discounts for lack of marketability; and
• A holding company discount (“Holdco Discount”) to his SOTP valuation to reflect the fact that investors in Sina were primarily indirectly investing in Weibo and that Sina’s market price had historically and consistently under-performed Weibo’s.

The dissenters’ expert valued the dissenters’ shares in Sina at US$137.42/share based solely on a SOTP valuation. His SOTP comprised:

• Weibo valued based on AMTP (with a DCF cross-check).
• Sina standalone valued based on revenue multiples.
• TuSimple valued based on comparable companies/ revenue multiples assuming an 80% likelihood of an IPO at the valuation date.
• Long term investments valued based on market prices with smaller discounts for lack
  of marketability.
• No reliance on the merger price for lack of a robust process and because of concerns he had about the independence of the special committee.
• No reliance on the AMTP due to his conclusion that the market for Sina’s was not semi-strong form efficient including because it was affected by COVID at the relevant time, there was no reliable means of rolling forward the market price, and the presence of material non-public information (“MNPI”).

Fair Value Judgment

The fair value judgment of the Court was circulated to the parties in draft on 14 August 2025 and handed down on 21 November 2025 and did not make any reference to the Trina Solar PC ruling.

The judge found that fair value was $105.26/share, based solely on an SOTP valuation. In particular:

• He agreed that the AMTP of Sina was not a good indicator of fair value, for the reasons given by the dissenters’ expert, and placed no reliance on it accordingly.
• While he recorded that the expert evidence was the market for Weibo was efficient at the relevant times, he refused to use it to value Weibo at the valuation date because it was affected by news of the merger.
• Although he found that the special committee of Sina was competent, independent and not conflicted and that there was no realistic possibility of New Wave paying more than it did or of another bidder paying more because of PRC regulatory issues, he rejected even a 10% reliance on merger price because of what he described as a “fatal flaw” in the merger process – the lack of a market-check. He was also critical of the failure to include a majority of the minority provision in the merger agreement.
• He refused to apply any Holdco Discount to the SOTP valuation of Sina, even though he agreed that it was an “observable phenomenon”, saying that it was not supported by the evidence or the academic materials on valuation, and that applying a Holdco Discount would amount to reverse engineering the SOTP valuation to align with the market-based methodologies.
• He rejected significant parts of the dissenters’ expert’s SOTP, including the valuation of Weibo, the valuation of Sina standalone, while largely accepting others, such as the valuation of TuSimple based on the likelihood of an IPO and the valuation of the LTIs. He also accepted certain of the dissenters’ expert’s inputs on the DCF valuation of Sina standalone.

Conclusion

The fair value judgment in Sina is the largest by value in s.238 appraisals and represents the greatest percentage uplift to merger price in any contested appraisal. It is being appealed. The judgment appears to be at odds with the comparative reliability guidance from Trina Solar from the PC and with the approach adopted in relation to AMTP and merger price by the Court in 51job (discussed below). The values attributed by the Court to Weibo and TuSimple as at the valuation date are multiples higher than the value of the firms at the time that the fair value judgment was handing down, inviting questions as to how this hindsight information should be incorporated into a determination of fair value.

¹ [2025] CIGC (FSD) 110