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Weibo shares tumble on China internet crackdown

24 June 2017

A man holds an iPhone as he visits Sina's Weibo microblogging site in Shanghai May 29, 2012.

The State Administration of Press, Publication, Radio, Film and Television said services operated by companies including Weibo - often called China's Twitter - had been broadcasting negative commentary in violation of government regulations. The move prompted a sell-off in the US -trade shares of Sina Corp. and its microblog service, Sina Weibo.

SAPPRFT said in their statement that Sina Weibo (a Chinese social media platform), iFeng (the online service of a television station), and ACFUN (a video sharing site) lacked the required license to stream audio and visual content and were "not in line with national audiovisual regulations". It ordered them to stop the services.

Communist leaders promote internet use for business and education but operate extensive censorship aimed at blocking access to material deemed subversive or obscene.

Those wanting to work with partners that are foreign must first undergo a thorough security check.

In January, the government announced the launch of a 14-month crackdown on cloud-hosting and content-delivery services. Nasdaq-listed shares in the Twitter-like microblogging service closed down 6.1% at $72.25, bringing the company's market capitalization to $15.8bn, from $16.8bn at the previous close.

Videos on Weibo could still be played on Friday, even though the company confirmed in a statement that it had received the regulatory notice and was communicating with authorities to try and understand the scope of the notice. While the regulator didn't say in its one-line statement what precise actions should or would be taken, it was enough to send Weibo's stock sliding 6.1 percent in NY on Thursday.

Sina Weibo's main business is a microblog service similar to USA -based Twitter Inc.

Hebei-based veteran journalist Zhu Xinxin said the government is afraid that spontaneous online video could spark political reactions among Chinese people.

Weibo shares tumble on China internet crackdown