technology

IQiyi Is Said to Raise $2.25 Billion in IPO Priced at Midpoint

IQiyi Inc., the Chinese video streaming site backed by Baidu Inc., raised $2.25 billion after pricing its U.S. initial public offering at the midpoint of a marketed range, according to people with knowledge of the matter.

The Netflix-style service sold 125 million American depositary shares at $18 apiece, the people said, asking not to be identified because the information is private. Beijing-based iQiyi offered the shares at $17 to $19 each, according to an earlier Securities and Exchange Commission filing.

IQiyi’s share sale is the second-biggest by a company listing in the U.S. this year. Brazilian fintech firm Pagseguro Digital Ltd. completed a $2.6 billion IPO in January, according to data compiled by Bloomberg.

A representative for iQiyi didn’t immediately respond to a request for comment. The iQiyi pricing was reported earlier by theflyonthewall.com, which didn’t say where it got the information.

IQiyi is in an increasingly expensive battle for content and users against Tencent Video and Alibaba Group Holding Ltd.’s service Youku-Tudou. All three have burned through billions of dollars buying and making the movies and TV shows needed to attract China’s viewers. Total revenue at iQiyi climbed to $2.7 billion last year with a net loss of $574 million, according to the company’s regulatory filing.

The company also faces significant regulatory risk, with censors prepared to cancel shows and block content deals. The platform was set to start broadcasting “Bojack Horseman” -- a Netflix animated show featuring dark humor that is popular among China’s youth -- until regulators intervened. Its self-produced reality show “The Rap of China” was a smash hit but quickly gained the ire of authorities; a sequel has yet to be announced.

IQiyi will list its shares on the Nasdaq Global Market under the symbol IQ. Goldman Sachs Group Inc., Credit Suisse Group AG and Bank of America Corp. are leading the deal.

— With assistance by David Ramli, and Alex Barinka

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