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LeEco's CEO Jia Yueting Says Company Overstretched, Now Running Out of Cash (bloomberg.com)
LeEco is a giant conglomerate in China. The company offers a range of services -- from online streaming service, to smartphones, to TV, to electric cars. On top of that, the company has been aggressively expanding into different markets with India and the United States being the two notable ones. How does it make so much cash? You wonder. It doesn't actually, according to the CEO, who has informed the employees that the company is quickly running out of cash. An anonymous reader shares a Bloomberg report: The billionaire chairman of China's LeEco has admitted his technology empire is running out of cash to sustain a headlong rush into businesses from electric cars to smartphones. In a lengthy letter to employees, company co-founder Jia Yueting apologized to shareholders and pledged to slash his income to 1 yuan (15 cents), slow LeEco's madcap pace of expansion, and move the company toward a more moderate phase of growth. LeEco is the umbrella holding company for a sprawling family of businesses that includes sports media, automobiles, smartphones and TVs. The company known for its LeTV streaming service has aggressively pursued funding and placed bets on new ventures, from an electric car plant in Nevada to a $2 billion acquisition of California TV maker Vizio Inc. "No company has had such an experience, a simultaneous time in ice and fire," Jia wrote in a letter, obtained by Bloomberg News, describing LeEco's rise and subsequent issues. "We blindly sped ahead, and our cash demand ballooned. We got over-extended in our global strategy. At the same time, our capital and resources were in fact limited."
Who cares? They will be replaced by the next company run by a meglomaniac pumping out cheap electronic garbage.
continued growth is unsustainable. sometimes you gotta get to a happy place and coast. shareholders are idiots. stocks that go up are nice, yes. Stocks that don't go down are nice too.
Seriously, Apple should buy Faraday Future and finish that work.
No doubt if another CHinese buys it, they will shut it down and move it back to CHina.
IOW, they will have simply picked up the IP from it.
I prefer the "u" in honour as it seems to be missing these days.
China will totally colonize the Moon and Mars. They are immune and exempt from the same forces of reality that are tipping the world toward economic collapse.
One of the most common causes of business failure is expanding too rapidly. You don't need an MBA to know that, a undergrad intro to business class would be enough.
Incompetent people with truckloads of cash, well just like any other company that managed to secure a dominant market position in China. In that case it is "Chinese soap operas on demand". My girlfriend was offered a "personal secretary" position in their Russian office. Amazingly, they appointed a Chinese C-level for their Russian office who does't speak any foreign language at all.
What do they want to push in Russia? Yes, what they are pushing are the same Chinese soap operas, but with computer translated Russian subtitles. They ran a ~50-70 people operation in Russia for close to a year, just to invite market entry consultants, make a single landing page, and do a 1 few weeks trial run of their Russian website.
An entrepreneur wanted to build a widget factory. So he got some investors to pony up some money. A while later he requested more money to build the widget factory. The investors demanded to see the entrepreneur and see what he had done with the money so far. They showed up at a brand new campus, state of the art office buildings, and numerous employees running around. But they wanted to see the widget factory that was bringing in the profits to pay for all this and why they should put more money into the business. The entrepreneur admitted that there was no widget factory, as he spent all the money on the offices.
"How does it make so much cash? You wonder."
What I wonder is who the hell edits this stuff.
To paraphrase Monkey-Boy Ballmer, "Editors, editors, editors, editors, editors, editors! Editors, editors, editors, editors, editors, editors, editors, editors, editors, editors, editors, editors, editors, editors, editors, editors, editors, editors!!"
Just cruising through this digital world at 33 1/3 rpm...
You bought Vizio _JUST_ to destroy it. Nice job.
The takeway from management perspective... CEO's should cut their own salaries instead of laying off part of their workforce, or at least in addition to. Banks should have done this before they asked for a handout... Way before, when the writing was on the wall... SMH
This post reminds me of an absurdly hilarious sequence in 'This Is Spinal Tap', except the moron in today's story is serious.
"No company has had such an experience, a simultaneous time in ice and fire,"
Derek Smalls: We're very lucky in the band in that we have two visionaries, David and Nigel, they're like poets, like Shelley and Byron. They're two distinct types of visionaries, it's like fire and ice, basically. I feel my role in the band is to be somewhere in the middle of that, kind of like lukewarm water.