Please ensure Javascript is enabled for purposes of website accessibility

Why iQiyi, Inc. Stock Popped Today

By Steve Symington – May 9, 2018 at 5:07PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The "Netflix of China" announced early results from its new partnership with JD.com. Here's what investors need to know.

What happened

Shares of iQiyi Inc. (IQ -9.03%) jumped 11.4% on Wednesday after the Chinese streaming-video specialist announced encouraging early results from its new joint membership program with e-commerce leader JD.com (JD 1.81%). More specifically, iQiyi revealed that more than 1 million users have signed up since the program's launch on April 27, 2018.

Young people in a circle looking at their smartphones

IMAGE SOURCE: GETTY IMAGES

So what

iQiyi also noted that when it revealed the exclusive partnership with JD early last week, its primary aim was "to provide high quality cross-platform services to members and explore high-value opportunities in the online paid service market."

"We are thrilled to see consumers rushing to take advantage of the many benefits of our joint membership package with JD," added iQiyi senior VP Yang Xianghua. "As Chinese consumers become more willing to pay for premium online services -- whether in entertainment or retail -- we are confident that subscription offerings that offer outstanding value will continue to increase in popularity."

Now what

iQiyi just announced its first quarterly report as a publicly traded company late last month, highlighting 67% year-over-year growth in membership revenue, to $334 million. In its press release this morning, the company revealed it already has over 61 million paying members and counting.

With the help of successful new partnerships like this one, and with China's booming middle class increasingly opting to pay for value-added services, iQiyi seems to be just getting started. It's no surprise to see the stock rallying in response.

Steve Symington has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends JD.com. The Motley Fool recommends iQiyi. The Motley Fool has a disclosure policy.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

iQiyi Stock Quote
iQiyi
IQ
$2.62 (-9.03%) $0.26
JD.com Stock Quote
JD.com
JD
$52.98 (1.81%) $0.94

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
342%
 
S&P 500 Returns
110%

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 10/05/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.