Sat, Jan 21, 2017 - Page 12 News List

LeEco founder sorry over share-boosting remarks

Bloomberg

Billionaire Jia Yueting, founder and chief executive officer of Leshi Internet Information & Technology Corp, a major investor in Faraday Future, speaks at the unveiling of the FF91 electric car at the Consumer Electronics Show in Las Vegas, Nevada, on Jan. 3.

Photo: Bloomberg

Leshi Internet Information & Technology Corp’s (LeEco, 樂視) shares climbed yesterday after billionaire founder Jia Yueting (賈躍亭) apologized for making “inappropriate” comments about boosting the share price of LeEco’s main listed unit to 100 yuan.

Jia’s remarks, made to investors at a public forum, was the latest slip-up for a technology conglomerate that in the past rew months has struggled to deal with a cash squeeze, pay its suppliers and respond to criticism about its capital-intensive business model.

Jia intended to show the company is committed to achieving rapid growth and boost investor confidence, Leshi said in a filing.

The billionaire’s comments earned a rebuke from the Shenzhen Stock Exchange, which issued a statement later yesterday singling out Jia and his company for violating regulations, and reminding them not to mislead investors with comments that might affect share prices.

“Jia realized he shouldn’t have made any comments regarding the company’s share price, and he apologizes to investors,” the company said.

LeEco’s billionaire founder is known for speaking his mind, be it issuing a challenge to Tesla Motors Inc or declaring his intention to take on China’s largest Internet firms.

Last week, he told investors he expects Leshi’s market value to reach US$100 billion, according to an online transcript of a meeting with financiers.

Jia also asked them for support in lifting the listed company’s share price to 100 yuan, according to the document, which was linked to its Web site.

Leshi shares climbed as much as 8 percent to a two-month high upon resuming trade yesterday after a one-day suspension, before closing up 3.2 percent. They had fallen more than 13 percent since November, around when Jia first revealed LeEco’s cash crunch, through Wednesday’s close.

LeEco, a sprawling conglomerate with interests ranging from electric cars and TVs to entertainment, announced last week it had scored 16.8 billion yuan (US$2.2 billion) in investments, mostly from fellow Chinese tycoon Sun Hongbin’s (孫宏斌) Sunac China Holdings Ltd (融創中國控股).

While that alleviated LeEco’s cash crunch, it was unclear how much — if any — of the money would go toward its publicly traded arm.

At the time, Jia would not specify exactly how the funds would be disbursed, apart from saying “most if not all” would bankroll non-listed businesses under the LeEco banner. That may encompass everything from Faraday Future (法拉第未來), the secretive venture that is trying to build a space-age super-car in the Nevada desert, to sports broadcaster LeSports (樂視體育).

LeEco remains one of China’s most outwardly ambitious technology companies. Last week, Jia said he would use Sunac’s investment to “surpass” China’s Internet triumvirate of Baidu Inc (百度), Alibaba Group Holding Ltd (阿里巴巴) and Tencent Holdings Ltd (騰訊) — together worth more than half a trillion US dollars in market value.

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