Baidu is insecure about the US investigation

Online video platform iQIYI, a subsidiary of Baidu, recently said it was under investigation by the US Securities and Exchange Commission (SEC). Immediately after this information, shares of iQIYI slipped on the Nasdaq stock exchange. Specifically, shares of iQIYI fell 19%, shares of Baidu also fell 5.5% in after-hours trading.

Online video platform iQIYI, a subsidiary of Baidu, recently said it was under investigation by the US Securities and Exchange Commission.

In the statement, iQIYI confirmed that it is cooperating with the SEC to review financial records and work documents since January 1, 2018. The focus will be on documents related to iQIYI’s acquisitions and investments revealed by research firm Wolfpack Research in April.

In its report, Wolfpack accused iQIYI of exaggerating the number of users, revenue, and content selling price. For its part, iQIYI has hired professional advisors. They cannot, however, predict the time, outcome or outcome of the investigation.

The SEC investigation comes at a time when the US administration threatens to delist Chinese companies if they fail to meet the US accounting standards, amid escalating tensions between the two economies. the world’s largest.

Baidu Chief Financial Officer Herman Yu said during a recent video conferencing meeting that the company cannot comment on iQIYI’s investigation. He only expressed concern that the problem might take longer to resolve than usual due to the Covid-19 pandemic.

IQIYI’s uncertainty overshadowed the relatively optimistic signal in Baidu’s Q2 financial report. Baidu’s second quarter revenue fell 1% to 26 billion yuan ($ 3.64 billion) from the same period a year ago. However, this figure is better than the average estimate of 25.7 billion yuan ($ 3.60 billion) by experts.

According to Reuters