In October last year, LeTV held a high-profile conference in the United States to announce to American users: LeTV's vertically integrated, open-loop ecosystem will soon be officially settled in the United States. However, in the immediately following November 2nd to 7th, in just four trading days, LeTV's listed market value evaporated by 12.8 billion yuan. What caused LeTV's crisis?
LeTV is exposed to arrears from suppliers and will end the burning mode ahead of schedule On November 2nd, there was news on the Internet that LeTV’s capital chain was tight and it was in arrears with more than 10 billion yuan from suppliers. On November 3, LeTV.com issued a statement and there was no arrears of huge sums. The rumors that the stock price fell due to arrears in the huge amount of money from suppliers are irresponsible smear.
Netizen Beijing Leshi Building staff pulled banners to protest LeTV’s arrears
LeTV said that it would take legal rights to defend against wages.
There are even online self-proclaimed "LeTV employees" broke the news on the anonymous social platform, LeTV's performance in a certain department stopped, requiring LeTV to reissue wages. There were also photos taken before the LeTV Building. Some people pulled banners to protest against the payment of the goods, causing the supplier to stop the factory for thousands of people.
As for the amount of the exposed arrears supplier, LeTV denied the fact, but did not disclose the specific amount of the supplier in arrears, although it claimed that it would take legal measures or even criminal means to safeguard its legitimate rights and interests, but it did not Let the market stop suspicion.
Subsequently, LeTV CEO Jia Yueting issued an internal letter saying that due to the company's rapid pace, the pressure on the supply chain has increased sharply in recent months, and the money-burning mode will be terminated early.
In this regard, Jia Yueting said that LeTV's financing ability is not strong, the mode is single, the capital structure is unreasonable, and the scale of external financing is difficult to meet the demand for rapid expansion of funds. LeTV's strategy will also undergo major changes. LeTV will implement deep development in the 7th ecological subsystem in the new stage. The non-listed company sector business should be business-oriented, and listed companies should aim at achieving overall profitability.
Jia Yueting also said that he is willing to take responsibility with the company's management and will only voluntarily receive the company's annual salary of one yuan from now on.
The first publicly-published internal letter deeply reflects the LeTV-burning expansion model. At the same time, what makes Jia Yueting alert is that there is a problem with the supply of LeTV mobile music Pro3. He said that “the surge in supply chain pressure in recent months, coupled with the funding problems that have always accompanied LeEco development, has led to tight supply and has had a significant impact on the continued development of the mobile phone business.â€
It is reported that just four days ago, LeTV sent a good news from the United States, and LeEco Mall was first sold. 4 hours and 15 minutes, LeTV super TV, super mobile phones and other smart derivatives are sold out. Among them, the sales volume of Le Pro3 is even higher than that of Le S3, and the TV uMax85 is on the market.
In the commodity line that is out of stock and received rave reviews, the Pro Pro3 supply has a problem. The internal explanation is that the front-end is in full swing and the back-end service cannot provide sufficient support.
Jia Yueting said in an interview with the media that the main problem with Le Pro3 is that in the mobile phone supply chain, the funds of non-listed companies need to be raised as soon as possible to supplement the problem of tight supply chain resources. At the same time, some external financing will be combined to end the current burning of LeTV. Money model.
LeTV's event caused a sharp drop in share prices, affecting related listed companies
After the event, Jubilee Technology suffered a decline in its share price. In this regard, Yinhao Technology said that its subsidiary, Xingke Electronics, which is a LeTV supply chain manufacturer, currently has no default on LeTV, but said that as of today's company orders, LeTV's share is 60%, other non- The LeTV brand mobile phone has an order share of 40%.
The companies that have not been spared are Cool. It is reported that Cool Group was also affected by LeTV's negative news on the 7th. The stock price fell sharply. On November 7th, the lowest price was 0.98 yuan, which was down 25.19%. Then the decline narrowed slightly. At present, LeTV holds 28.83% of Coolpad shares and is its largest shareholder.
In addition, including Shenghong Technology, Compal Electronics, Shanghai Herbi, Sunny Optical, Xinli Semiconductor, Guoen shares, Heshuo Technology, Foxconn and other LeTV suppliers have come out, on the investor interaction platform on the arrears In response, most of the companies said that LeTV did not default on the payment, and said that the cooperation with LeTV in the "reasonable credit range" did not affect the company's current performance.
How far can LeTV go in the face of public crisis?
LeTV's first ecological strategy is based on the sub-business lines and the platform business. However, LeEco's rhythm is too fast. When the company is chasing madness and blindly burning money to pursue the scale of expansion, the globalization strategy has been drawn for a long time.
For example, the initial investment of LeTV was very huge, and it took more than 10 billion of its own funds, which directly led to my personal financial support for LeEco. In addition, the company's financing capacity is insufficient, the mode is single, the capital structure is unreasonable, and the external financing scale is difficult to meet the rapidly expanding capital demand.
The end result is that LeEco has opened up one battlefield after another and won a certain battle. However, due to insufficient backup supply, the other necks of the battlefield have become obviously weak.
To this end, LeTV announced that it has officially entered the second ecological strategy stage, focusing on the existing ecological model and officially proclaiming the mode of burning money.
The second phase of LeEco includes: LeEco's sub-ecology will shift from burning money to deep-through market; from independent fast-running to inter-organizational realization, active cross-border innovation, focusing on ecological value creation; from extensive management Value mining and promotion, fast, extreme and efficient service to high-value users.
At the same time, the independence and rapid expansion of the 7-big son ecosystem in the United States will come to an end. The expansion of the globalization strategy has come to an end, and now it is focused on the three regional value markets of China, the United States and India, and has made real breakthroughs step by step.
In the future, LeTV will use listed companies as the company's profitable exports, and the performance of listed companies will enter a leap-forward growth period.
During the reporting period, LeTV's monetary funds and cash flow were all at the best stage in history. The member's payment and advertising revenue as the core profit business achieved substantial growth year after year; the super TV ecosystem will soon enter the full profit period, including the big screen. Advertising, online distribution, application distribution, big-screen games, big-screen shopping, etc. have entered a high-speed realizable period.
In the new stage, LeTV will invest more energy in the listing of LeTV, and accelerate the development of several advantageous sectors. At the same time, accelerate the release of ecological value and business realization: through product innovation and business model innovation, sales of smart terminals will drive the rapid growth of member-paid business and advertising revenue.
However, how far can LeTV in the future go? According to many private investors interviewed by the author, LeTV has suffered from the financial crisis and expressed its ambition to expand globally. However, these people are still optimistic about the future development of LeTV.
A number of people said that LeTV is still very hard-working and motivated in the management, and the fundamentals are still very good. LeTV's product line and ecosystem are very attractive, optimistic about the development of LeTV. According to relevant sources, the entire LeTV ecosystem is in a good state today, and it is incalculable in the early stage, but it must be pragmatic and have funds to provide support. "If LeTV has a core team to do it, there will still be people who invest. Although it has experienced this public opinion incident, there will still be financing opportunities."
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