IQ - Is iQiyi Becoming a Liability for Baidu?
iQiyi (NASDAQ: IQ), which owns of the top video streaming platforms in China, was recently slammed by allegations of fraud by Wolfpack Research. The activist research firm, which prepared the report with prolific short-seller Muddy Waters, claimed that iQiyi inflated its revenue by 27%-44% last year.
Wolfpack claims iQiyi inflated its user numbers by 42%-60%, overstated its "barter" revenue from sub-licensing its content to other platforms, then boosted its expenses to "burn off fake cash." It cites in-person surveys of over 1,500 people in China, a former employee of iQiyi, and SEC reports as its main sources.
Image source: iQiyi.