(Yicai Global) June 17 -- iQiyi's stock price rallied after Tencent Holdings was said to plan on becoming the largest shareholder of Tencent Video's competitor.

iQiyi’s share price [NASDAQ: IQ] climbed 25.85 percent to USD24.10 yesterday, the highest closing price since February 2019.

The internet giant is looking to enhance the video platform's competitiveness, Reuters reported yesterday, citing people familiar with the matter. Based on the Beijing-based target company's market cap on June 15, the buyer would need to pay USD8 billion for the controlling shareholder's stake.

Tencent, iQiyi, and Baidu, the biggest shareholder, all declined to comment on whether such a plan exists, according to the same report.

Tencent's video platform and iQiyi each had 110 million paying users as of March, while competition is becoming increasingly fierce with emerging sites such as cartoon-heavy Bilibili and ByteDance's platforms.

iQiyi's cost of content jumped 11 percent in the first quarter from a year earlier, logging a net loss of USD400 million, according to its earnings report. Its revenue growth rate dropped from 43 percent to 9 percent. Meanwhile, Bilibili’s revenue soared by 69 percent during the same period.

Baidu holds 7.9 million class A common shares and 2.9 billion class B common shares of iQiyi, with a 56.1 percent stake and nearly 93 percent of the voting rights, according to the tech behemoth's filing in April.

Editor: Emmi Laine