iQIYI stock lost more than 3% in premarket trading after the company announced private placement financing of US$285 million.
iQIYI, Inc.(Nasdaq: IQ) ("iQIYI" or the "Company"), an innovative market-leading online entertainment service in China, today announced that the Company has entered into subscription agreements with Baidu and a consortium of financial investors that includeOasis Management Company Ltd., who have agreed to subscribe for and purchase from the Company, through a private placement, a total of 164,705,882 newly issued Class B ordinary shares and 304,705,880 newly issued Class A ordinary shares of the Company, for a total purchase price ofUS$285 millionin cash. Baidu will subscribe for Class B ordinary shares, and the financial investors will subscribe for Class A ordinary shares. The private placement is subject to customary closing conditions and the closing is expected to take place in the near future.
"We would like to thank all our shareholders for their generous support and strong faith in the future outlook of the Chinese long-form video industry. We are committed to our operating strategy that centers around improving our business operating efficiency and generating shareholder values." commented Mr.Yu Gong, Founder, Director, and Chief Executive Officer of iQIYI.
The securities sold in the private placement have not been registered under theU.S.Securities Act of 1933, as amended (the "Securities Act"), or any state or other applicable jurisdiction's securities laws, and may not be offered or sold inthe United Statesabsent registration or an applicable exemption from the registration requirements of the Securities Act and applicable state or other jurisdictions' securities laws.