Vizio’s Chi­nese owner halts trad­ing amid cash crunch

Kuwait Times - - TECHNOLOGY -

SHANG­HAI:

Fast-grow­ing Chi­nese tech firm LeEco, which ear­lier this year pur­chased US tele­vi­sion maker Vizio, has sus­pended trad­ing of its listed arm’s shares amid fears that a cash crunch had caught up with the com­pany. In a fil­ing with the Shen­zhen Stock Ex­change, LeEco said it had sus­pended shares of Leshi In­ter­net In­for­ma­tion & Tech­nol­ogy Wed­nes­day af­ter the stock plunged 7.85 per­cent the pre­vi­ous day.

Orig­i­nally a video-stream­ing provider, LeEco has ex­panded rapidly with in­vest­ments in sec­tors as wide-rang­ing as self­driv­ing cars, sports broad­cast­ing rights, smart­phones, film pro­duc­tion, and tele­vi­sion man­u­fac­tur­ing. CEO Jia Yuet­ing, who has pre­vi­ously dis­missed US tech­nol­ogy gi­ant Ap­ple as no longer in­no­va­tive, ad­mit­ted in a let­ter to em­ploy­ees that LeEco had “over-ex­tended,” Bloomberg News re­ported ear­lier this week.

“We blindly sped ahead, and our cash de­mand bal­looned,” Bloomberg quoted the let­ter say­ing.

LeEco an­nounced in July that it would buy US smart-TV maker Vizio for $2 bil­lion.

LeEco has an­nounced plans to take on US tech giants in their home mar­ket with smart­phones, tele­vi­sions, bi­cy­cles, self­driv­ing elec­tric cars, vir­tual re­al­ity head­sets, and a plat­form to con­nect all of its of­fer­ings to movies, tele­vi­sion shows, ser­vices, and more in the In­ter­net cloud.

But Bloomberg said the sprawl­ing con­glom­er­ate had only one prof­itable en­tity, the video-stream­ing ser­vice LeShi. LeShi stock has dropped 36 per­cent since it re­sumed trad­ing in June fol­low­ing a hal­fyear sus­pen­sion im­posed as it sought gov­ern­ment ap­proval for fi­nanc­ing ar­range­ments to help fund its break­neck ex­pan­sion. —AFP

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