Shares of iQIYI (NASDAQ:IQ) had a bad market day today. Share prices fell as much as 14% in the afternoon, recovering to a 13.3% drop by the closing bell. There was no obvious reason for this plunge, other than the young stock's heaping reserves of volatility making another appearance.
The so-called Netflix (NASDAQ:NFLX) of China -- and Chinese business partner to that streaming video giant -- had no news to speak of today. And while several Chinese internet companies saw their stock prices sliding on Wednesday, iQiyi's drop was far sharper than the general trend -- no industry-based negativity to hang your hat on today.
Because iQiyi is a very young stock with nearly no operating history as a stand-alone business, the stock is prone to wild swings. With only one quarterly earnings report under its belt so far, the video services vendor hasn't given investors a clear idea of what the business should be worth. In this category, share prices can make wild swings on the slightest of news -- or for no reason at all.
And that's all iQiyi is doing today.
After this sudden correction -- again, on no real news in any language I can understand -- iQiyi investors are still enjoying a 58% gain over the last month alone. The stock has doubled since its IPO in late March. Until the company builds a more substantial operating history, these sharp turns will keep happening every now and then. It was a drop today, but most of the big single-day moves so far have been in a positive direction.
So, it's no surprise to see iQiyi shares making another strong move on a day devoid of company-specific or even sector-wide news.