(Yicai Global) Nov. 17 -- Shares of iQiyi were sold and bought wildly after the Chinese video platform reported better-than-expected third-quarter earnings but with fewer subscribers than during the worst Covid-19 times.

iQiyi’s stock price [NASDAQ:IQ] slumped as much as 7.09 percent yesterday but closed 4.01 percent up at USD27.77 as investors were digesting the latest earnings report.

The platform's loss narrowed to CNY1.2 billion (USD173 million) in the three months ended September from a CNY3.7 billion loss logged a year ago, the Beijing-based company said in its earnings report published yesterday. Its revenue fell 3 percent to CNY7.2 billion (USD1.1 billion) despite increasing advertising and membership sales.

The guidance for the fourth quarter is cautious. Over those three months, revenue may fall or rise by 3 percent to a point between CNY8.28 billion and CNY7.73 billion (up to USD1.1 billion), the company predicted.

"In the coming quarters, we may continue to see fluctuations in the number of subscribers, driven by the normalization of user behavior and content pipeline," said Chief Executive Gong Yu.

Subscriptions declined by 1 percent to 104.8 million by Sept. 30 while more than 99 percent of the clients were paying for the service. That means that iQiyi has lost 14.1 million customers since March when China was most acutely dealing with the Covid-19 epidemic. Interestingly, at that point, the firm's shares were less than half of what they are worth now.

Some clients may further be scared away by price hikes. On Nov. 13, the company raised its monthly subscription fee to CNY25 from CNY19.8 (to USD3.80). However, Gong said that the customer base has not majorly changed since then. Moreover, users tend to be drawn by original high-quality content so the platform's mid to long-term prospects should not change, he added.

Baidu, a major shareholder of iQiyi, announced today that it will purchase live-streaming platform YY Live. That deal is not likely to directly affect iQiyi’s business, as the two platforms' business models and strategies are far from each other, according to Gong.

Gong also touched on the topics of intellectual property and user-generated content. iQiyi will deal with content made out of its IP and posted on short video platforms through legal and commercial negotiation methods, he said.

Editor: Emmi Laine