Daily Management Review

Chinese analog of Netflix is aiming at $ 8 billion-worth IPO


09/27/2017


iQiyi service, owned by Baidu Inc., plans to conduct an IPO in the US in 2018. When posted, the cost of the most popular in China streaming service similar to Netflix, can be estimated at more than $ 8 billion, according to Bloomberg, citing two informed sources.



The company controlled by search giant Baidu is going to start negotiations with banks and deal organizers and is aiming at a valuation of $ 10 billion, the agency's interlocutors assert. Baidu wants to keep a controlling stake in iQiyi after holding an IPO through double-class shares. However, the IPO process is still at the initial stage, and the final evaluation may change.

iQiyi needs a safety cushion, while the service faces competition from platforms owned by Alibaba Group Holding Ltd. and Tencent Holdings Ltd. Baidu, which also invests heavily in artificial intelligence and autonomous vehicles, needs to buy and create more content to maintain its leadership among online video platforms.

Assessed at $ 10 billion, iQiyi will be valued as a share in Netflix, but will surpass the Chinese competitor Leshi Internet Information & Technology Corp., whose shares are traded on the exchange. The IPO can be carrieв out after Baidu’s founder and chairman of the board of directors Robin Lee last year abandoned plans to buy a controlling stake in iQiyi when assessing value of the company at $ 2.8 billion, not having reached an agreement on the price and structure of the deal. This proposed transaction aroused criticism from Acacia Partners LP, a shareholder who argued that the price was too low, and cited studies that then valued the business at $ 5.8 billion.

Quality of the video is a key factor for retaining users and increasing advertising revenue. Tencent and Alibaba said that they intend to spend more money on the content. Tencent, for example, buys "Game of Thrones" and broadcasts NBA matches. Meanwhile, Baidu reduces cost of peripheral services - from food delivery to travel.

IQiyi said in June that it is negotiating to share additional data and revenues with partners, including Google, to support its platform. Many Google services that distribute content, such as YouTube, remain blocked in China, which reduces ability of the American company to expand its presence in the country.

source: bloomberg.com






Science & Technology

China is developing technology to capture greenhouse gases

IEA: The growth of renewable energy is slowing

Google introduces new smartphone and beta Android Q

SpaceX’s Dragon Crew Capsule Test Met With Anomaly

New Security Study Finds Millions Use 123456 As Password For Email Accounts

The Devastating Panama Disease Could Spell Extinction For Bananas

Walmart to hire 4 thousand robot cleaners

Samsung Galaxy Fold: Expensive but fragile

USA and South Korea launch the first commercial 5G networks

Deliveries of AR/VR devices to grow by 54% in 2019

World Politics

World & Politics

Theresa May to resign on June 7

The Earth Is ‘Not On Track’ To Tackle Global Warming: The U.N. Secretary General

Is Finland’s aging population turning the country into Japan?

The United States will impose new duties on Chinese goods on Friday

Jyrki Katainen: EU is not a milk cow

Oil lobby and the planet's future

Trump files a lawsuit against Deutsche Bank and Capital One

Trump Urged Abe To Influence Japanese Auto Firm To Produce More Vehicles In The U.S.