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Weibo chairman: We priced our IPO too low

Following the stellar debut of Weibo, China's Twitter-like microblogging service, Chairman Charles Chao said that in retrospect the initial public offering (IPO) was priced too low.

Weibo shares have risen 33 percent above the IPO price of $17 since its debut on the Nasdaq exchange last Thursday. Shares were priced at the bottom end of the $17 – $19 range.

"In hindsight, I priced it a little bit low. But if you look at the market in the last 2 weeks it was very tough," all of the IPOs were priced below the range and most traded below their IPO price, Chao told CNBC on the sidelines of a summit organized by the China Entrepreneur Club in Nanning, the capital city of Guangxi province of China.

Read MoreSina's Twitter-like Weibo launches IPO

"So we were lucky to price within the range and trade up after that, so I think we're doing okay," he added.

Weibo is being closely watched as a gauge of investor demand ahead of the highly anticipated IPO of Chinese e-commerce giant Alibaba in the U.S. market later this year.

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Weibo raised a less-than-expected $286 million after it cut the size of its IPO amid a selloff in technology shares - with the tech heavy Nasdaq Composite index suffering its biggest drop in two-and-a-half years earlier this month - and concerns about slowing user growth. The number of daily active users grew 4.2 percent on quarter in the September-December period - the slowest pace in the history of the service.

It originally planned to sell 20 million primary American depositary shares (ADSs), but cut the number by 16 percent to 16.8 million.

Read MoreHedge funds get clobbered by fall in tech stocks

When asked whether the company had plans to offer those shares to the market, he said no.

"We still have the greenshoe, and we don't care too much about how many shares were sold because we're not doing this for cash purposes," he said. A greenshoe is a clause contained in the underwriting agreement of an IPO that allows underwriters to buy up to an additional 15 percent of company shares at the offering price

"We really want to establish ourselves as an independent public company for Weibo because it's very important for this platform to grow independently in the future," he added.

Charles Chao, chief executive officer of Sina, attends the IPO ceremony for Weibo at the Nasdaq in New York on April 17, 2014.
Scott Eells | Bloomberg | Getty Images
Charles Chao, chief executive officer of Sina, attends the IPO ceremony for Weibo at the Nasdaq in New York on April 17, 2014.

Weibo is owned by Chinese internet giant Sina and Alibaba. Alibaba, which took an 18 percent stake in Weibo last year, exercised an option it had to increase that stake to 32 percent during the listing process. The two companies decided to collaborate in areas including online payment as more users turn to e-commerce on mobile devices.

Read More Five things to know about Alibaba

Chao says the partnership between Weibo and Alibaba is "very exciting."

"If you think about the internet world, everything is moving to mobile, and Alibaba is a dominant e-commerce eco system, and we're very big in terms of mobile platform," he said.

As of March, Weibo has 144 million active users, with over 70 percent accessing the platform from mobile phones, according Chao.

"At the end of the day of the mobile is the future and commerce is the way of monetizing that," he said.

Road to profitability

Weibo posted its first operating profit of more than $3 million - on advertising revenue of $56 million - in the fourth quarter of 2013.

Read MoreHow the Alibaba IPO will help Yahoo's stock price

This year, Chao says he is not thinking too much about profits, and is instead focused on growing the user base and user engagement.

"We will have to wait until next year to see more meaningful profit, this year we're not too concerned, we really want to build a big sales platform."

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