(Bloomberg) – Iqiyi Inc., a Chinese Netflix-style streaming service backed by Baidu Inc., tumbled up 19% after announcing the company was being investigated by the U.S. Securities and Exchange Commission.
Iqiyi said on Thursday that it is cooperating with the probe, which seeks financial and operating records dating back to January 2018. Investigators are also looking for documents on acquisitions and investments that were cited by a short-selling Wolfpack Research report in April. said the company. Iqiyi has hired advisers to conduct an internal review.
“These professional advisers have examined the company’s books and records and undertaken testing procedures which, in their opinion, are necessary and appropriate for the evaluation of the key allegations in the Wolfpack Report,” Iqiyi, in Beijing, said in a statement. statement, which accompanied their second-quarter results. The assessment will include “analysis of accounting policies, data analytics on whether the company produced orders and inflated revenue and / or expenses.”
The SEC probe is the latest example of U.S. scrutiny of Chinese tech companies. The Trump administration has tried to cut TikTok and WeChat, two popular apps in China.
Iqiyi’s US stock fell as late as $ 17.50 in late trading. The stock was up 2.7% this year due to the close of Thursday.
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