Hearing rumors that Disney took a large position in iQIYI, the Netflix of China. iQIYI operates a platform that provides a collection of Internet video content, including professionally-produced content licensed from professional content providers and self-produced content. It provides membership, content distribution, live broadcasting, and online gaming services. The company is based in Beijing, China.
It recently had its IPO and began trading on the Nasdaq on March 29, 2018.
As of March 18, 2018, iQIYI had over 60.1 million paid subscribers. iQIYI initiated paid subscriptions as early as 2011. At that time, iQIYI’s small number of paid subscribers grew slowly. However, in 2015, the market experienced an explosive growth in paid subscriptions due to its first exclusive member-only TV drama. Gong predicted that, in the next five years, the growth rate of paid subscribers will reach 35 percent, or even exceed 40 percent.
Netflix’s Q4 2017 earnings showed that as of Dec. 31, 2017, Netflix had 54.75 million U.S. subscribers and 62.83 million international subscribers. Amazingly, iQIYI has over 60.1 million paid subscribers and the company is just getting started with its growth strategy.
I’m not sure if iQIYI is the Netflix of China, or the Disney of China, or maybe a mixture of both, but one thing is clear, the company will likely one day surpass the size of Netflix in the U.S.
I’m hearing rumors circulating that Disney has taken a large stake in iQIYI. I’m unable to determine a source of these rumors and so extreme caution is warranted.
IQ stock is in an uptrend. The large players volume and Twiggs Money Flow is all over the place which is common for a stock that recently IPO’d. Notice the Pocket Pivot (blue dot) signal back on May 22, 2018. A big buyer can cause a Pocket Pivot signal like this if they are not careful to run their orders through a dark pool. If the rumors about Disney taking a position in IQ stock are true, I’m thinking that May 22, 2018 could be where Disney took a position.
I’m adding IQ stock to the long-term buy list. I’m really excited about the potential profits that can be made in this stock. It’s like going back in time and getting another chance to invest in Netflix in its early days. In some ways, this is an even better investment that Netflix was as Netflix was a ground-breaker and some of their decisions, like investing in creating their own content, were very risky propositions because no one had done it before. iQIYI can just copy the business model of Netflix and even Disney.
Disclosure: As Premium members know, I took a long position in iQIYI stock today.