On August 14, iqiyi announced that the company was investigated by the US Securities and Exchange Commission (SEC), which requested to provide financial records since January 2018, including the financial contents mentioned in the short Wolfpack Research Report. < p > < p > iqiyi said that it had hired consultants to investigate Wolfpack research’s charges, and could not predict the duration and results of the SEC investigation. < p > < p > subsequently, iqiyi’s official microblog said that it had been actively cooperating with all the regular inquiries and investigations of the SEC, and at the same time, it also actively engaged professional consultants for internal independent review. “We are confident in the stable and rigorous corporate governance structure and internal control process that have been continuously built in the past 10 years. We believe that the results of the survey will once again show all investors the soundness and responsibility of iqiyi. Iqiyi will continue to bring higher quality content and service to the majority of users. On the same day, iqiyi also released its unaudited financial report for the second quarter ending June 30, 2020. According to the financial report, in the second quarter of 2020, iqiyi’s total revenue will reach 7.4 billion yuan, a year-on-year increase of 4%. The net loss was 1.4 billion yuan, significantly narrowed compared with the loss of 2.048 billion yuan in the same period of last year. < / P > < p > on April 7 this year, Wolfpack research, a market research firm, published a 37 page report, pointing out that iqiyi had committed fraud before its IPO in 2018, and has been doing so since. According to the agency, iqiyi overstated its revenue in 2019 by about 8-13 billion yuan (27% – 44%). < / P > < p > according to Wolfpack research, iqiyi has overstated the number of users by about 42% to 60%. In addition, iqiyi also exaggerated the company’s expenses, as well as the price of purchasing content, other assets and acquisitions, “in order to consume false cash and cover up its fraud from auditors and investors”. < / P > < p > Wolfpack research said that from October to November 2019, 1563 people in iqiyi’s target population in China were personally surveyed, and it was found that about 31.9% of iqiyi users visited only iqiyi VIP content through their membership with iqiyi partners such as Jingdong or Xiaomi. Iqiyi calculates double membership based on its total membership, which means it records all revenue and records the partner’s share as an expense. This allows iqiyi to exaggerate its income and destroy fake cash. < / P > < p > in addition, short agency muddy water also said on social media that it had helped Wolfpack research investigate iqiyi for a year and had short the stock. < / P > < p > in response to the query of Wolfpack research, iqiyi said in response to the reporter’s interview that “its As a responsible listed company, all financial and operational data disclosed by us are true and meet the requirements of the sec. We firmly deny all false accusations and reserve the right to pursue legal proceedings. ” According to the financial report released today, in the second quarter of 2020, iqiyi’s total revenue will reach 7.4 billion yuan, a year-on-year increase of 4%. The total revenue and year-on-year growth rate are in line with the previous guidelines of iqiyi. By the end of the second quarter, iqiyi had 105 million subscribers. Gong Yu, founder, director and CEO of iqiyi, said, “in the first half of the year, the new crown epidemic had a great impact on our business, resulting in abnormal user behavior, data fluctuations and unprecedented challenges. Nevertheless, relying on rich IP assets, excellent content and strong technology platform, the company has further consolidated its market leading position. ” < / P > < p > “in the second quarter, our member services revenue grew 19% year-on-year and remains our largest pillar business. Through the launch of Star Diamond membership package, we have further optimized our membership system to meet the needs of different users. ” Wang Xiaodong, chief financial officer of iqiyi, said: “we continue to make strategic investment in original content to improve self-control ability, and at the same time invest more prudently in all aspects, which makes our loss rate narrow. As the epidemic is contained in China, its negative effects are gradually fading away, and we believe that we will achieve healthy and sustainable long-term growth. ” In terms of business, iqiyi’s membership service revenue in the second quarter of 2020 will be 4 billion yuan, up 19% compared with the same period in 2019. The growth is mainly driven by the growth of subscription members and the company’s various operational measures to enhance the monetization of member business. Under the influence of China’s challenging macro-economic environment, iqiyi online is worth 100 million yuan. In addition, iqiyi achieved an income of 860.6 million yuan in content distribution in the second quarter. Over the same period, other revenue reached 918.9 million yuan. In the second quarter of 2020, iqiyi’s revenue cost decreased by 2% compared with the same period in 2019. The operating loss was 1.3 billion yuan. The operating loss rate is 17% and 26% in the same period of 2019.