Why iQIYI Stock Is Nosediving

iQIYI Inc - ADR IQ shares are trading lower by 12.78% to $5.84 during Tuesday's trading session after the company announced a proposed offering of 76.5 million American Depositary Shares, priced at $5.90 per share.

iQIYI says the company intends to grant the underwriters a 30-day option to purchase up to an aggregate of 11,475,000 additional ADSs. The company also says it plans to use the net proceeds from the offering for working capital purposes, including serving its existing debt obligations.

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According to data from Benzinga Pro, IQ has a 52-week high of $7.10 and a 52-week low of $1.65.