Chinese Streaming Giant iQiyi's Stock Drops in U.S. Market Debut
The Netflix-like company, controlled by online search giant Baidu, raised $2.25 billion in its IPO on Nasdaq.
Shares of iQiyi, the Chinese video streaming service that has been compared to Netflix and that is controlled by online search giant Baidu, fell in its U.S. stock market debut Thursday.
The company raised $2.25 billion in the initial public offering, which priced iQiyi's U.S. depositary shares at $18 each. The stock opened at $18.20 in New York, but ended up closing down 13.6 percent at $15.55.
That gave it a market valuation of about $11 billion, according to Bloomberg data.
iQiyi, led by CEO Yu Gong, is the largest Chinese video streaming service to go public. It is competing with the likes of Tencent Video and the Alibaba Group Holding's Youku Tudou. The company has said it would use the proceeds from the IPO mostly on buying and producing more content to attract more users, as well as on researching new technologies.
IQiyi disclosed in previous regulatory filings that 421 million mobile users use its service at least once a month, with 126 million using it at least once a day. That makes it the most popular Netflix-style video streaming service in China.
The company posted a loss of $574 million on revenue of $2.7 billion last year. In an interview with The Hollywood Reporter last fall, its CEO said that 40 percent of the company's revenue comes from advertising, 33 percent from subscribers and the rest from such things as gaming, e-commerce and other offerings.
iQiyi's stock is trading on Nasdaq under ticker symbol IQ.