IQiyi, Baidu's Netflix of China, Falls in U.S. Market Debut -- Update
30 March 2018 - 8:54AM
Dow Jones News
By Austen Hufford
The Netflix-like video-streaming unit of Chinese search-engine
giant Baidu Inc. closed 13% below its offering price in its market
debut Thursday.
The decline came despite American depositary shares of iQiyi
Inc. opening trading Thursday at $18.20, slightly higher than the
$18 offering price. The IPO, which sold 125 million shares and
raised $2.25 billion, priced at the midpoint of its $17 to $19
marketed range.
IQiyi shares, trading on the Nasdaq Global Market under the
ticker IQ, closed at $15.55. IQiyi was the most heavily traded
stock by share volume Thursday on the Nasdaq.
The unprofitable company has been looking to raise money to stay
ahead in the competitive Chinese video-streaming sector where tech
titans Tencent Holdings Ltd. and Alibaba Group Holding Ltd. also
have offerings. It plans to spend half of the proceeds raised from
the IPO to "expand and enhance" its content offerings, according to
a securities filing.
Robin Li, Baidu co-founder and chief executive, is retaining
more than 93% of voting control in iQiyi, the filing said.
IQiyi, founded in 2010, said it is China's largest
video-streaming service by amount of time spent watching. IQiyi
reported 60.1 million subscribers as of Feb. 28, roughly 59 million
of whom pay for the service.
Underwriters of the offering could also purchase up to 18.8
million iQiyi shares.
Write to Austen Hufford at austen.hufford@wsj.com
(END) Dow Jones Newswires
March 29, 2018 17:39 ET (21:39 GMT)
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