Baidu to list video service iQiyi
Baidu (BIDU) is poised to stir the online video market as it prepares to separate its video streaming unit, iQiyi, into a standalone publicly traded company. According to a Wall Street Journal report, Baidu has considered listing iQiyi this year with the IPO either in the US or Hong Kong.
The IPO would value the video unit between $4 billion and $5 billion, according to the report. Baidu is considering taking iQiyi public only a few months after the unit announced plans to invest as much as $1.4 billion in content acquisitions as it fights for space in Asia’s rapidly growing streaming video market. iQiyi’s content partners include 21st Century Fox (FOX), Paramount Pictures, and Lions Gate Entertainment. As of June 2016, iQiyi said it had 20 million paying subscribers, double the figure it reported in December 2015.
A fresh headache for Netflix’s global ambitions
The listing of iQiyi is likely to tighten competition for Netflix (NFLX) and Amazon (AMZN) and threaten their global ambitions. Netflix has expanded into 200 countries and territories, and Amazon is also eyeing a presence in more than 200 markets.
Buyout offer rejected
A group of investors led by Baidu CEO Robin Li unsuccessfully attempted to acquire iQiyi last year. Li placed a bid of $2.3 billion for iQiyi, but the offer was declined because some investors felt it undervalued the business.