Weibo Corporation, owner of the popular Chinese microblogging site Weibo, raised US $286 million by selling 16.8 million shares at US $17 each at its initial public offering on NASDAQ in New York.

The amount raised, however, failed to meet expectations because of a reduced offering size. Weibo shares reached as high as 40 percent above its debut price two hours after it began trading but by the end of the trading day on 16 April (New York time), Weibo shares settled at US $20.24, up 19 percent.

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Weibo's shares opened below the US $17 IPO price, at 16.26, before recovering to rise 10 percent in the first few minutes of trading.

Weibo is a subsidiary of Sina Corporation, which owns 77.6 percent of the company, and Alibaba Group Holdings Ltd, which bought a 19.3 percent stake for some US $600 million in April 2013. Weibo is one of the most popular sites in China and is patronized by well over 30% of China's total number of Internet users.

Weibo generated US $188 million in revenue in 2013, up from US $66 million a year earlier, from its 144 million monthly active users. It remains unprofitable but its net losses have dropped from US $102 million to US $38 million. 

Most of the company's revenue comes from advertising.  Additional revenues come from games and other services.

The generally positive Weibo IPO is seen as a big test of demand for Chinese Internet stocks ahead of the much anticipated IPO of Alibaba Group.

Some analysts remain confident about the success of Alibaba's IPO, noting that 618 million people use the Internet in China, a number that is twice the population of the United States.

Only 46 percent of the Chinese population is online compared to an estimated 85 percent of American adults. The potential for Internet growth in China remains huge.

"I think it has been a tough market," said Weibo chairman Charles Chao. "But on a relative basis, we're having great results."