LeEco's Cash Crunch is Worse than Expected, Says CEO

LeEco has been in the news a lot lately for its lack of funds, with plenty of news coming out that the company hasn't been able to pay its partners and now it appears that the cash crunch is "far worse than expected" according to the company's CEO and Chairman Jia Yueting. LeEco expanded at an unprecedented rate (not just for LeEco but for any company period). It launched a few smartphones and other products in the US last fall, and immediately after doing so, it began running into financial trouble. Despite raising quite a bit of cash last year and this year, it still isn't enough to save the company, or get them out of the cash crunch.

In 2017, LeEco had gotten a Chinese property developer, Sunac to agree to invest 15 billion yuan into the company, which included 9 billion yuan into the company's non-listed entities. Yueting stated that he thought the 9 billion yuan into their non-listed units would be enough, but the "result obviously did not meet our expectations". Yueting continued by stating that "since October, we took some measures and made some mistakes, but LeEco's non-listed units' finances got tighter." This was all stated at the company's annual shareholder meeting, for the group's main listed unit, which is Leshi Internet Information & Technology Corp.

LeEco had big dreams and ambitions. A company that was once thought of as the "Netflix of China", had wanted to beat Elon Musk and Tesla in the premium electric car race. But it also wanted to build better hardware which included smartphones, TV's and more. Basically it was building products for customers to use to watch its content through its streaming service. But it appears that LeEco had its hands in too many areas to early. LeEco is planning to further consolidate its non-listed units in the near future, which should help it get back on track, but its hard to say at this point. It has already laid off a good number of its US employees, after pulling out of its deal with American-TV manufacturer, VIZIO. And it has shifted its focus in the US to those Chinese-speaking households in the country.

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Alexander Maxham

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Alex has written for Androidheadlines since 2012 as Editor of the site and traveled the World to many of the biggest Smartphone and Technology events. Alex has a background in Technology and IT and Deep Passion for Everything Android and Google. His specialties lay in Smartphones of all budgets, Accessories, Home Automation and more. Contact him at [email protected]