Things continue to look grim for China's debt-ridden LeEco
Its video streaming unit began trading again after a nine-month halt, but shares took a 10 percent nosedive within seconds of opening.
A debt collector holds up a piece of paper that reads 'LeTV owes money, LeTV pay up!' at Radegast Hotel during the company's interim shareholdersâ general meeting in Beijing, China last July.
LeEco started 2017 with promise, but appears to have fallen flat by the end of the year. And now, 2018 isn't off to a good start.
Shares of Leshi Information & Technology Corporation, LeEco's video streaming arm, took a nosedive when it resumed trading today after a more than nine-month long hiatus, Bloomberg reported Wednesday.
The news comes as its new CEO, Sun Hongbin (also chairman of Chinese property developer, Sunac Holdings), declared he will stop pumping funds to save the struggling firm, having previously invested about $2.35 billion to help it.
Leshi is also owed 7.5 billion yuan (about $11.7 billion) by LeEco's subsidiaries, although the figure has been disputed by its parent, which says the debt should only amount to 6 billion yuan (around $0.93 billion), half of which it has developed a solution to repay.
Things weren't always so bad for Leshi and LeEco, whose founder once had lofty ambitions for it. Jia Yueting had envisioned a tech empire that will rival every tech powerhouse including Apple , Netflix and Tesla, but its rapid expansion had caused the company to end with financial problems it couldn't handle, leaving huge numbers of its staff jobless. Jia eventually landed in debt crisis, drawing the attention of a Chinese court which seized his assets.
Last December, LeEco's former boss was ordered back to China to solve his financial problems, but the man denied the request, saying he has to remain in the US to work on a new electric car. Instead, he sent his wife home to help settle his debts. She updated the progress on Chinese Twitter-esque Weibo, saying she has partially repaid debts owed to China Merchant Bank.
Stocks went down 10 percent to 13.80 yuan ($2.16) in mere seconds of its reopening in Shenzhen, China, according to the publication. It added that one fund management company projected a fall to as low as 3.90 yuan ($0.61).
In comparison rivals such as Netflix, Chinese search giant Baidu and Chinese tech mammoth Tencent reported share prices of $250.29, $257.35 and $60.45 respectively at time of writing.
Tencent, also the first Chinese firm to cross $500 billion in valuation, is worth highest at nearly $570 billion, whereas Leshi is valued at about $8.61 billion.
CNET has reached out to Leshi for a comment.
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