Chinese Internet company LeEco (previously Letv) had called out Apple for being “too slow” at innovating at the launch of its first Superphones in April 2015. It seems the company is now hit with cash crunch that has caused the company to re-consider business strategies, halting share trade in Leshi Internet Information and Technology Corp. To recall, LeEco’s CEO Billionaire Jia Yueting had last month confessed about a cash crunch in the company in a letter to employees last month.
The CEO had said that the company “over-extended” in its global strategy as it entered new sectors including self-driving cars, sports, smartphones, filmmaking, and televisions.
A new report by the Wall Street Journal cites the company’s statement to the Shenzhen stock exchange that cited the falling share prices as the reason for stopping trading, “To protect the interests of the company and of many investors, the company needs to halt trade and investigate these matters. At the same time, the company is in the process of planning major matters, which are expected to involve integration of industry resources. There is still uncertainty around this matter.”
According to the WSJ, stocks in LeEco’s 12-year-old video-streaming company – Leshi – plunged 7.9 percent on Tuesday. In a statement to employees, Yueting last month had said, “We blindly sped ahead, and our cash demand ballooned. At the same time, our capital and resources were in fact limited.”
The Chinese company earlier this year bought US television manufacturer Vizio for $2 billion (roughly Rs. 13,450 crores) in a deal that made sure LeEco presence in the US market.
In October, LeEco made its official entry into US market with an array of products including smartphones and televisions. The company also showcased its Super Bike which ran on Android and offered connectivity and security features.