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Published on : Mar 19, 2018

iQiyi Inc., a China-based video streaming service provider, under the parent company Baidu Inc., the multinational technology company, has in March launched initial public offering (IPO) in New York in March 2017. The move is expected to give the firm a significant competitive edge over its rivals in China as well get a stronghold in the global market. The IPO worth US$2.4 billion is majorly aimed at expanding its range and quality of content. Of note, the parent company Baidu owns 69.6% percent of the online video platform. The firm in a filing made to the U.S. Securities and Exchange Commission declared that it intends to offer 125 million American depositary shares (ADS). Each of these shares will be priced at $17 to $19.

IPO to enable Netflix-like Video Platform to flex Financial Muscle in Chinese Market

Underwriters have the option of selling additional shares of Netflix-like video platform, 18.75 million in number. With this deal, IQiyi, will be listing on the Nasdaq stock market. The video streaming service provider will use a significant part of the fund-around 10%-to consolidate its technological expertise and the remaining part of the proceeds will be used for various corporate ends.  

After the completion of the IPO, the company will continue to remain its main shareholder. In 2017, the firm’s revenue surged by 55 percent from 2016, worth US$2.7 billion. The company net loss accounted for 3.74 billion yuan. The Chinese content service provider isn’t new in the efforts to raise capital through IPO. Bilibili, a Chinese video sharing website, has set to capitalize through its listing on New York by offering depository shares at slightly higher value--$10.50 to $12.50 each. The company seeks to raise $525 million.