BIDU Baidu Inc

By Austen Hufford 

The Netflix-like video-streaming unit of Chinese search-engine giant Baidu Inc. closed 13% below its offering price in its market debut Thursday.

The decline came despite American depositary shares of iQiyi Inc. opening trading Thursday at $18.20, slightly higher than the $18 offering price. The IPO, which sold 125 million shares and raised $2.25 billion, priced at the midpoint of its $17 to $19 marketed range.

IQiyi shares, trading on the Nasdaq Global Market under the ticker IQ, closed at $15.55. IQiyi was the most heavily traded stock by share volume Thursday on the Nasdaq.

The unprofitable company has been looking to raise money to stay ahead in the competitive Chinese video-streaming sector where tech titans Tencent Holdings Ltd. and Alibaba Group Holding Ltd. also have offerings. It plans to spend half of the proceeds raised from the IPO to "expand and enhance" its content offerings, according to a securities filing.

Robin Li, Baidu co-founder and chief executive, is retaining more than 93% of voting control in iQiyi, the filing said.

IQiyi, founded in 2010, said it is China's largest video-streaming service by amount of time spent watching. IQiyi reported 60.1 million subscribers as of Feb. 28, roughly 59 million of whom pay for the service.

Underwriters of the offering could also purchase up to 18.8 million iQiyi shares.

Write to Austen Hufford at austen.hufford@wsj.com

(END) Dow Jones Newswires

March 29, 2018 17:39 ET (21:39 GMT)

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