Shares of Chinese online entertainment company iQiyi (NASDAQ:IQ) surged on Thursday, despite no meaningful news. The stock has been rocketing higher since early May, more than doubling over the past six weeks. Shares of iQiyi were up about 16.5% when the market closed.
iQiyi did announce changes to its board of directors on Thursday. The company appointed Ctrip CEO Jane Jie Sun to the board as an independent director and a member of the audit committee. Dr. Haifeng Wang, senior vice president of Baidu and general manager of that company's artificial intelligence (AI) group, was also appointed to the board.
The stock likely is moving for other reasons, though, as these board changes are minor developments. iQiyi also announced on Thursday an AI programming competition aimed at video-based multimodal biometric recognition. Participants will attempt to identify celebrities in iQiyi's vast collection of video data, with the winning team set to receive 200,000 Chinese Yuan Renminbi, or about $31,000. Again, this piece of news is minor.
Instead of being driven by news, the stock's move higher on Thursday may simply be driven by investor optimism. The company, often referred to as the Netflix of China, is growing revenue at a breakneck pace. In the first quarter, revenue shot up 57% year over year. Significant losses and the fact that the company's gross margin is effectively zero are being ignored by the market.
After rocketing higher over the past six weeks, iQiyi stock doesn't appear to be slowing down.