LeEco appears to be making another tough decision as they have just announced that they're pausing their stock trades for Leshi Internet Information and Technology Corp., the company's video website, following a price decline on their shares. This comes as the Shenzhen-based company has recently been rumored to be laying off around 1,400 employees, and a few weeks after the LeEco's CEO, Jia Yueting, wrote a corporate letter stating that they had over expanded, which is likely in regards to their entry into the US market earlier this Fall, and after an even earlier acquisition of VIZIO, one of the more popular US TV brands.
According to Leshi, the pause on stock trades happened Wednesday before the market opened, and was due to local reports on the margin calls that were kickstarted by sinking prices of shares that happened at close of the market the day before. Share prices fell by about 7.9 percent on Tuesday at the end of day. Due to the decline, Yueting may need to provide fresh funds to lenders but the exact amount was not mentioned as local reports about those figures are apparently incorrect according to LeEco. Once that's sorted, LeEco will likely make that information public.
While stock trades have been stopped for the moment, Leshi says they plan to reopen trading of their shares once they're able to fully investigate why the prices of shares dropped so drastically. The company also plans to make some major changes to the business and is currently in the process of discussing what those changes will be, and when they'll be implemented. While Leshi doesn't give specifics, they do state that they're currently "undergoing major matters" which could end up including the integration of company resources. The company is clearly unsure of more than a few factors regarding the changes and what resources may need to be integrated, so at the moment there is little detail on this. It's also not clear how these problems with stock prices may affect LeEco's other ventures, such as the Vizio acquisition, as well as their future in the US market and other global markets where they have planned to expand into.