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Baidu’s iQiyi plans for IPO

Nasdaq’s President Nelson Griggs predicted that the year 2018 will be a good year for IPOs. And the first three months of this year actually witnessed some prominent tech companies angling to go public. After Spotify and Dropbox, Baidu’s (BIDU) online video subsidiary iQiyi is the latest one to join the IPO party.

According to the filing made to the SEC, Chinese Internet giant Baidu is moving ahead with its plans to take its subsidiary iQiyi public, a move that will give the company an opportunity to raise funds. The company plans to list iQiyi shares on the Nasdaq stock exchange under the ticker IQ.

Popularly known as China’s Netflix, Baidu’s iQiyi was launched in 2010 with paid and ad-supported content. The platform boasts of having 50.80 million subscribers who pay for the content. In the fourth quarter of 2017, average mobile monthly active users count increased 3.9% to 421.3 million.

In 2017, iQiyi membership services generated nearly 37.6% of the total revenue. Total revenue jumped 55% to $2.7 billion last year. Despite the rise in revenue, iQiyi failed to report profit ever since it was launched.

Considering these numbers, it wouldn’t be surprising to see iQiyi outdo Netflix in membership revenue and premium subscribers. In China, iQiyi battles against rivals like Tencent and Alibaba (BABA). Last year, iQiyi entered into a deal with Netflix (NFLX), according to which, few of Netflix’s original productions were made available on iQiyi.

iQiyi plans to offer 125 million American depositary shares with a price band of $17 to $19 per share. Baidu, which has been listed on Nasdaq since 2015, will continue to stay as a major shareholder of iQiyi even after the completion of the IPO. Baidu currently owns 80.5% of iQiyi.

The company plans to list iQiyi shares on the Nasdaq stock exchange under the ticker IQ.

Joining iQiyi is another Chinese video streaming company Bilibili, which plans to go public. Bilibili plans to list on the NYSE and aims to raise $525 million by offering 42 million American depositary shares with a price band of $10.50 to $12.50 per share.

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