Financial Markets
Reuters
- iQiyi, a Chinese streaming service comparable to Netflix, stated that the US Securities and Exchange Commission has actually introduced an investigation into the company.
- Shares of iQiyi tanked as much as 18%in premarket trading Friday.
- The probe follows a short-seller company called Wolfpack Research questioned iQiyi’s user numbers, sales, expenses, and the 2018 acquisition of Skymoons.
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Shares of iQiyi, a Chinese streaming service similar to Netflix, tanked as much as 18%in premarket trading Friday after the company stated the United States Securities and Exchange Commission introduced an investigation into it.
The SEC probe follows an April report from Wolfpack Research, a short-seller firm, alleged that the business “was devoting scams well before its IPO in 2018 and has actually continued to do so ever considering that.” The report brought into question iQiyi’s user numbers, sales, expenses, and the 2018 acquisition of Chengdu Skymoons Digital Home Entertainment.
During a Thursday incomes report, iQiyi stated the SEC has asked for particular financial and operation records from January 2018 on, in addition to documents connected to acquisitions and financial investments determined in the Wolfpack report. The business said it is working together with the SEC..
It also said that following the publication of the Wolfpack Report, it hired expert consultants for an internal review of the claims.
Shares of Baidu, a Chinese search-engine giant and iQiyi’s majority stakeholder, also fell as much as 5%in premarket trading Friday.
The announcement of the SEC probe comes as the United States is stepping up oversight of Chinese companies that trade on United States stock market following a number of recent accounting scandals consisting of Luckin Coffee, which produced sales.
Recently, the Trump administration proposed a plan where US-listed Chinese firms would have to comply with US audit requirements by 2022 or face providing up their American listings..
iQiyi has gotten approximately 5%year-to-date through Thursday’s close
