Newest Innovations In Consumer Technology On Display At 2014 International CES (Photo : Getty Images)
Like Alibaba which broke IPO records when it listed in the U.S., iQiyi, the video-streaming site of Chinese internet giant Baidu, plans to go public to raise fresh funds. The video streaming site was the one that broadcast Korean drama “Descendants of the Sun” which reached more than 1 billion views in China.
iQiyi plans to issue a convertible bond or similar instrument, The Wall Street Journal reported, to raise capital from investors before the public listing overseas. The IPO is expected to raise for iQiyi $1 billion and increase its value up to $5 billion.
However, iQiyi would negotiate with prospective investors which could change the target IPO amount. At its yearly marketing conference in Shanghai in October, the video streaming company stated it planned to invest up to $1.4 billion to purchase and produce content in 2017.
Baidu Chief Executive Robin Li offered to buy iQiyi in early 2016 for $2.3 billion, but the IPO is considered to be a better deal for sharedholders of Baidu that the buyout bid of the Li-led consortium. The consortium includes Yu Gong, the founder and CEO of iQiyi.
App Annie, a data-analytics company, projects live streaming in China to grow in value to $5 billion by the end of 2017 as the service experiences rapid revenue hike growth in Asia. In December 2015, the number of iQiyi subscribers grew to 10 million which currently had further increased to 20 million. Part of the boost in subscribers happened when iQiyi streamed “Descendants of the Sun.”
NASDAQ predicts the firm’s online video services revenue would go up at an annual rate of 60 percent in 2016 to $1.3 billion, or 11 percent of Baidu’s net revenues. But while it is the fastest-growing revenue stream for Baidu, the internet giant of China was operating it at a loss the past few years which would continue over the next few years until the country’s target audience matures.
