Shares of a Netflix-like video-streaming company in China tumbled after it said it was under investigation by the SEC
By Chong Koh Ping Close Chong Koh Ping Aug. 14, 2020 4:37 am ET China’s iQiyi Inc., IQ -2.43% a Netflix-like video-streaming company, said it was under investigation by the U.S. Securities and Exchange Commission, sending its shares plunging 12% in after-hours trading.
On Thursday, iQiyi said the U.S. regulator had asked for financial and operating records from January 2018 onward, and documents tied to acquisitions and investments cited by Wolfpack. iQiyi said it had also hired professional advisers to conduct an internal review, and they were examining the report’s key allegations.
In April, iQiyi said the Wolfpack report contained “numerous errors, unsubstantiated statements and misleading conclusions and interpretations,” and it was committed to high standards of governance and internal controls. Luckin’s finances had been questioned in research published by short sellers. Short-selling investors seek to profit from a declining stock. They do this by selling borrowed shares, hoping to buy them back at a lower price later and to pocket the difference.
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