Vizio’s Chinese owner halts trading amid cash crunch

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