IQiyi shares fall amid stagnant subscriber momentum

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U.S.-listed shares of Chinese streaming company iQiyi Inc. are off 15.6% in Tuesday trading after the company posted third-quarter subscriber numbers that failed to show growth relative to the second quarter. IQiyi reported 104.8 million total subscribing members as of the end of September, compared with 104.9 million as of the end of June and 105.8 million as of the prior September. “We thought that weak content availability and COVID normalization would lead to a weak result for member additions but did expect growth,” Loop Capital Markets analyst Rob Sanderson wrote in a note to clients. “We think investors recognize that development of China’s video streaming industry has been slower than expected over the past two years but will likely grow into a significant industry over time. We think the share price for IQ is anchored by the view that either Tencent or Alibaba will eventually look to consolidate the company.” Shares of iQiyi have risen 11% so far this year as the S&P 500 has gained 12% and as the KraneShares CSI China Internet ETF has increased 55%.
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