March 29, 2018 / 1:07 AM / a month ago

Chinese streaming company iQiyi prices IPO at $18/share - source

NEW YORK (Reuters) - Chinese streaming platform iQiyi Inc priced its U.S. initial public offering at $18 per share on Wednesday, in the middle of its target range, a source familiar with the matter said.

A person holds a phone with video streaming service iQiyi in Jinan, Shandong province, China, in this May 25, 2016 photo illustration. REUTERS/Stringer

The Netflix-like video platform had issued price guidance of $17-$19 per share. At $18, proceeds will total $2.25 billion (£1.6 billion).

Representatives for iQiyi did not immediately respond to an emailed request for comment.

IQiyi, which has around 50 million subscribers and whose programming includes music reality show “The Rap of China” and crime drama “Burning Ice,” will list shares from Thursday on the Nasdaq under the symbol “IQ”.

Beijing-based iQiyi, which is majority-owned by Chinese internet search firm Baidu Inc, said it plans to use half the net proceeds from the offering to expand and enhance its content offerings.

Baidu will continue to be the company’s controlling shareholder upon completion of the offering.

IQiyi has posted losses since its inception in 2010. It reported a net loss of 3.74 billion yuan ($594.16 million) for 2017, compared with a 3.07 billion yuan loss a year earlier.

Unlike Netflix, which makes the vast majority of revenues from subscriptions, membership service fees provided 37.6 percent of iQiyi’s revenues in 2017.

That was up from 18.7 percent in 2015, though iQiyi has said it expects it will remain around the 2017 level “for the foreseeable future.”

The rest of its revenues come from areas such as online marketing, syndication and gaming.

Goldman Sachs (Asia) LLC, Credit Suisse and BofA Merrill Lynch are the lead underwriters for the IPO.

Reporting by Joshua Franklin; Editing by Sandra Maler and Leslie Adler

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