U.S. shares of iQIYI drop on SEC probe

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U.S.-traded shares of iQIYI Inc. shares fell in the extended session Thursday after the Chinese online entertainment company said it was the focus of a Securities and Exchange Commission probe and forecast revenue below Wall Street estimates. American depositary receipts of iQIYI dropped 14% after hours, following a 2.4% decline in the regular session to close at $21.68. The company said the SEC was investigating following allegations from Wolfpack Research that the company was issuing fraudulent financial statements. iQIYI said it was conducting an internal review of the allegations. Additionally, iQIYI said it expects third-quarter revenue of $984.1 million, while analysts had forecast on revenue of $1.08 billion. The company reported a second-quarter loss of $204.1 million, or 28 cents a share, while revenue rose 4% to $1 billion from the year-ago quarter. Analysts surveyed by FactSet had forecast a loss of 46 cents a share on revenue of $1.05 billion.
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