iQiyi, the video streaming service unit of Chinese search engine giant Baidu, has launched an initial public offering in New York worth up to US$2.4 billion.
The company is offering 125 million American depositary shares in the US$17-$19 range for a Nasdaq listing, Reuters reports, citing a filing to the US Securities and Exchange Commission.
Underwriters have an option to sell an additional 18.75 million shares, which if exercised in full could bring the value of the deal to about US$2.7 billion, the report said.
iQiyi, a Netflix-like video platform, plans to use about half of the proceeds to broaden and enhance its content offering while 10 percent will be earmarked to strengthen technology.
The rest would go toward general corporate purposes, according to its filing.
Baidu, which currently owns 80.5 percent of iQiyi, will continue to be its controlling shareholder after the listing.
At the end of February, iQiyi had 60.1 million subscribers, over 98 percent of whom were paying members, the company claims.
In 2017, the firm posted revenue of 17.38 billion yuan (US$2.7 billion), up 55 percent over the previous year. However, it recorded a net loss of 3.74 billion yuan.
The listing will give the firm extra financial muscle as it squares off against rivals in the Chinese market, including Alibaba Group’s Youku Tudou.
Meanwhile, Bilibili, another Chinese video streaming company, also set tentative pricing for its New York listing, seeking to raise as up to US$525 million, according to Reuters.
Its depository shares will be offered in a range of US$10.50 to US$12.50 each.
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