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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."
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.