LeEco Billionaire Apologizes for Remarks on Share-BoostingBloomberg News
Listed unit Leshi says CEO is sorry for seeking stock support
Shares climb upon resuming trade after a one-day suspension
Leshi Internet Information & Technology Corp.’s shares climbed Friday after billionaire founder Jia Yueting 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 past 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 Shenzhen’s stock exchange, which issued a statement later on Friday singling out Jia and his company for violating regulations, and reminding them not to mislead investors with comments that may 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 $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 on its website.
Leshi’s shares climbed as much as 8 percent to a two-month high upon resuming trade Friday after a one-day suspension, before ending Friday 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.
“Hope everyone could pool their efforts to bring the price to 100 yuan,” Jia said, according to the transcript.
LeEco, a sprawling conglomerate with interests ranging from electric cars and TVs to entertainment, announced last week it had scored 16.8 billion yuan ($2.2 billion) in investments, mostly from fellow Chinese tycoon Sun Hongbin’s Sunac China Holdings Ltd. 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 wouldn’t 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, the secretive venture that’s trying to build a space-age super-car in the Nevada desert, to sports broadcaster LeSports.
LeEco remains one of China’s most outwardly ambitious technology companies. Last week, Jia stated he would use Sunac’s investment to “surpass” China’s Internet triumvirate of Baidu Inc., Alibaba Group Holding Ltd. and Tencent Holdings Ltd. -- together worth more than half a trillion dollars in market value.
— With assistance by Yuan Gao, and David Ramli