iQIYI (IQ) Stock Rockets On Rumors Of Large Stake Purchase

iQIYI IQ Stock News

IQIYI Inc (NASDAQ: IQ) is flying for the top in the market this morning. However, the company hasn’t issued any press releases or filed anything with the SEC. So, what’s the deal? It all has to do with rumors that a large stake in the company is about to be purchased. Here’s what’s going on:

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IQ Stock Runs For The Top On Chatter

As mentioned above, iQIYI is making a run for the top int he market this morning, but no news has been released. The gains seem to be the result of a report by Reuters that Tencent Holdings is interested in acquiring a large stake in the company.

In fact, according to the report, Tencent plans on becoming the largest shareholder in IQ stock through the transaction. As a result of the report, IQ become the most traded stock in the premarket this morning, with millions of shares being traded.

The report cited people familiar with the matter who said that Tencent is making an approach to Baidu, a company that owns about 56% of IQ. The conversations between Baidu and Tencent surround the purchase of a large stake, but according to the sources, the exact size of that stake has not been determined as of yet.

In most cases, I stay away from the rumors. After all, most of them prove to be invalid, and when they do, the values of the stocks that they are centered around will fall. However, this rumor seems to have its share of validity.

In particular, it’s not like Joe Blow Blog or Mom and Pop Stock Shop announced this news. We’re talking about Reuters, one of the most trusted sources on the street today. Considering this, there’s a good chance that these talks are actually taking place.

What To Look For Ahead

While there is a strong chance that the rumors surrounding iQIYI are true, we don’t know much about the transaction yet. How large of a stake does Tencent want to purchase? Are they interested in acquiring the entire company? Ultimately, there are more questions than answers here at the moment.

Nonetheless, with a large deal likely on the horizon, IQ stock is one worth watching closely.

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