February 5, 2023

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Chinese language on-line video platform iQIYI introduced on March 4 that the corporate has entered into subscription agreements with Baidu and a consortium of economic buyers together with Oasis Control Corporate Ltd. for a complete acquire worth of $285 million in money.

Traders have agreed to subscribe for and buy from the corporate, via a personal placement, a complete of 164,705,882 newly-issued Magnificence B unusual stocks and 304,705,880 newly-issued Magnificence A unusual stocks within the corporate. Baidu will subscribe for the Magnificence B unusual stocks, whilst the monetary buyers will subscribe for the Magnificence A unusual stocks.

In line with its newest monetary record, iQIYI‘s running losses had been very much narrowed beneath a chain of measures to scale back prices and building up potency, nevertheless it nonetheless faces unsustainable money drift issues. Within the fourth quarter of 2021, iQIYI‘s money reserves totaled 3.075 billion yuan ($486 million), a year-on-year lower of 71.8%.

As of December 31, 2021, the company held a complete of four.4 billion yuan in money, money equivalents, limited money and momentary investments. Its capital reserves on the time have been deemed to be inadequate.

The excessive price of content material is likely one of the main the explanation why iQIYI has struggled to earn a living. In This autumn 2018, the platform’s content material prices accounted for greater than 90% of its general earnings. From Q2 2020, the similar ratio was once introduced all the way down to inside of 70%. Content material prices principally come from the procurement of copyright dramas, the manufacturing of on-line dramas and diversity presentations, amongst different classes.

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All over a convention name at the company’s This autumn monetary record closing yr, Gong Yu, Founder, Director, and Leader Govt Officer of iQIYI mentioned that the lengthy video streaming business has entered a brand new turning level characterised by way of pursuing potency, loss relief and earnings, as an alternative of pursuing high-speed enlargement and marketplace proportion.

SEE ALSO: iQIYI’s Web Losses Achieve 968.1 Million in 2021

Gong additionally identified that the corporate’s purpose is to effectively ruin even on the subject of non-GAAP operations for the total yr of 2022, and to damage even in quarterly non-GAAP operations as early as imaginable.