According to the investigation by the US Securities Regulatory Commission, the stock price fell by more than 19% after hours. Previously, it denied Wolfpack short report source: Daily Economic News
since being targeted by shorting agency Wolfpack, iqiyi has been in constant trouble. Now facing the investigation by the US Securities and Futures Commission, the stock price fell by more than 19% after hours.
after Thursday’s local time, China capital stock iqiyi released its unaudited financial report for the second quarter ending June 30, 2020. According to the financial report, iqiyi’s total revenue in the second quarter of 2020 will reach 7.4 billion yuan (about US $1 billion), an increase of 4% compared with the same period last year. The total revenue and year-on-year growth rate are in line with the company’s previous guidelines. In the second quarter, each ads loss is 1.96 yuan. The company expects revenue of 6.95 billion yuan to 7.4 billion yuan in the third quarter, down 6% year on year.
to the surprise of investors, iqiyi disclosed in the quarterly report at the same time that, affected by the short selling report of Wolfpack research in April this year, the US Securities Regulatory Commission (SEC) required the company to provide some financial data and operating information since January 1, 2018, as well as the information involved in the short report. The company said it was cooperating with the SEC investigation, but could not predict the timing and outcome of the SEC investigation.
iqiyi said that after Wolfpack’s short report was issued, the company hired professional consultants to conduct internal review on some key allegations in Wolfpack’s report and report its findings to the company’s audit committee. At present, the internal review is in progress, and the company is unable to predict the completion time, results or consequences of the internal review.
under the influence of multiple factors, iqiyi’s share price fell by more than 19% after hours. Iqiyi’s shares fell 17.44% to $17.9 after hours. Iqiyi fell 2.43% to $21.68 on Thursday, with a market capitalization of $15.9 billion.
on April 7, Wolfpack, a short seller, released a report on shorting iqiyi, claiming that iqiyi’s revenue in 2019 was about 8-13 billion yuan, accounting for 27% – 44% of the reported revenue. At the same time, the company also falsely increased the number of users by about 42% – 60%. Wolfpack research also pointed out that iqiyi exaggerated the company’s expenses, as well as the price of purchasing content, other assets and acquisitions, in order to consume false cash to cover up the fraud of its auditors and investors.
in response, iqiyi said at that time that a third-party organization published a report questioning iqiyi, and the data cited was seriously untrue and inconsistent with the actual situation. As a responsible listed company, all financial and operational data disclosed are true and meet the requirements of the sec. The company firmly denies all false accusations and reserves the right of legal prosecution. ”
after Wolfpack’s short report, iqiyi’s share price fell to the year’s low, and then recovered steadily. In June this year, with “Baidu to Tencent sell iqiyi equity” rumors, led to a sudden rise.
as one of the head video websites, iqiyi has gone through 10 years. Since the disclosure of independent listing data in 2018, iqiyi’s financial data has provided market reference for the video website industry which has been in a loss state.