‘Netflix of China’ stock tanks amid SEC probe into billion-dollar fraud allegations
Wolfpack Research says Baidu’s iQiyi inflated its 2019 revenue by up to 44%
IQ stock slides 14% after revealing SEC investigation
The claims ring eerily similar to the Luckin Coffee scandal, in which the incumbent Chinese coffee chain’s CEO was found to havefaked more than $300 millionworth of annual revenue earlier this year.
Luckin Coffee stock fell more than 94% in the fallout, and was ultimately delisted from the Nasdaq.
In a bid to reassure shareholders, IQ initially responded to Wolfpack Research’s allegations witha defiant press releasepublished shortly after Wolfpack Research’s report:
However, the company recently mentioned it enlisted professional advisers to conduct an internal review of Wolfpack Research’s allegations shortly after they were made public, but again warned it cannot predict when the audit will be completed, its outcome, or potential consequences.
IQ stock was down more than 14% during the first hours of Friday’s trade.
Story byDavid Canellis
David is a tech journalist who loves old-school adventure games, techno and the Beastie Boys. He’s currently on the finance beat.David is a tech journalist who loves old-school adventure games, techno and the Beastie Boys. He’s currently on the finance beat.
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