Shares of iQiyi (NASDAQ: IQ) surged on Tuesday after news broke that Tencent (OTC: TCEHY) is seeking to become the Chinese video streaming company's largest investor. By the close of trading, iQiyi's stock was up more than 25% after rising as much as 38% earlier in the day.
Chinese digital payments, gaming, and social media titan Tencent reportedly reached out to Baidu (NASDAQ: BIDU) -- which owns 56% of iQiyi's stock and controls nearly 93% of its voting power -- to purchase a portion of its shares. The talks are reportedly in a preliminary phase.
Should a deal come to fruition, it would combine two of China's leading streaming services. Like iQiyi, Tencent Video has more than 100 million subscribers.
Source Fool.com