The Netflix of China is prepared for Wall Avenue.
Video streaming web site iQiyi is preparing for an IPO on the Nasdaq underneath the inventory ticker “IQ.” The corporate filed paperwork late Tuesday to boost $1.5 billion in its providing, however the closing quantity might find yourself greater.
iQiyi stated the determine was simply an estimate for regulatory submitting functions. It did not give particulars on the scale of the stake it plans to checklist. Karen Chen, an analyst at funding financial institution Jefferies, informed CNN her workforce places iQiyi’s valuation at simply over $17 billion.
New York is the popular vacation spot for Chinese language tech firms seeking to go public, in response to monetary information agency Dealogic. Baidu, the web agency that owns most of iQiyi, and Alibaba (BABA), China’s largest e-commerce firm, each took their IPOs to town.
One attraction is that US guidelines permit founders to maintain management of their firms even after their stakes are diluted by promoting shares on the general public exchanges, Dealogic says.
However Wall Avenue hasn’t labored out for some Chinese language tech companies. Qihoo 360, a cybersecurity firm, delisted from the New York Inventory Change in 2016 and is shifting its inventory to Shanghai.
iQiyi is aiming to capitalize on the rising variety of Chinese language shoppers prepared to pay for high-end content material. Regardless of the supply of pirated DVDs and illegally streamed TV reveals and films, iQiyi has managed to enroll greater than 50 million subscribers to its service.
The corporate posted revenues of 17 billion yuan ($2.7 billion) in 2017, up 52% from a 12 months earlier. However like many tech firms going public, iQiyi will not be worthwhile. It misplaced almost four billion yuan final 12 months ($574 million).
One cause for that’s the fierce competitors to draw paying subscribers in China.
iQiyi’s principal rival is Tencent Video, and e-commerce firm Alibaba can be a giant participant with its video streaming platform Youku.
They’re all competing with one another to supply premium content material — the driving power for getting folks to join subscriptions.
iQiyi even teamed up with Netflix (NFLX) final April, putting a deal that provides its Chinese language subscribers entry to widespread authentic sequence like “Black Mirror,” “Stranger Issues” and “Mindhunter.”
Profitable subscribers requires burning plenty of money. Baidu owns 80.5% of iQiyi, however it doesn’t have the deep pockets of rivals Tencent (TCEHY) and Alibaba, in response to a analysis notice from International Fairness Analysis.
Itemizing iQiyi individually will make it simpler for the streaming firm to boost funds immediately from monetary markets.
— Daniel Shane contributed to this report.