SAN FRANCISCO, April 15, 2020 (GLOBE NEWSWIRE) -- Hagens Berman urges investors in iQIYI, Inc. (NASDAQ: IQ) who have suffered significant losses to submit their losses now. The firm is investigating possible securities law violations.
Relevant Holding Period: Before Apr. 8, 2020
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iQIYI (IQ) Investigation:
The investigation focuses on whether iQIYI misled investors about the company’s financial results and internal controls over financial reporting.
On Apr. 7, 2020, Wolfpack Research published a scathing report, “iQIYI: The Netflix of China? Good Luckin.”
According to the report, the company was committing fraud well before its 2018 IPO and has continued to do so ever since. Wolfpack estimates that (a) iQIYI inflated its 2019 revenue by 27% - 44%, and (b) overstates its user numbers by 42% - 60%, and then (c) inflates its expenses, the prices it pays for content, and other assets and acquisitions in order to burn off fake cash to hide the fraud from its auditors and investors.
In addition, according to Wolfpack “[a]rguably one of the most egregious examples of accounting fraud IQ commits is the inflation of barter revenue” whereby barter sublicensing revenues are determined by internal estimates of the value of traded content, allowing management to unilaterally assign inflated values to the transactions.
This news drove the price of iQIYI ADSs sharply lower during intraday trading on Apr. 7, 2020.
“We’re focused on investors’ losses and whether iQIYI misled investors about the company’s revenues and user numbers,” said Reed Kathrein, the Hagens Berman partner leading the investigation.
Whistleblowers: Persons with non-public information regarding iQIYI should consider their options to help in the investigation or take advantage of the SEC Whistleblower program. Under the new program, whistleblowers who provide original information may receive rewards totaling up to 30 percent of any successful recovery made by the SEC. For more information, call Reed Kathrein at 844-916-0895 or email IQ@hbsslaw.com.
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Contact:
Reed Kathrein, 844-916-0895