Homepage / Technology / 'Ponzi scheme': Co-founder of one of China's top tech firms attacks LeEco
Amazon says this Prime Day was its biggest shopping event ever Kudlow says President Trump is 'so dissatisfied' with China trade talks that he is keeping the pressure on As stocks regain their footing, an ominous warning looms Goldman Sachs downgrades Clorox to sell, says valuation is 'unsustainably high' How Satya Nadella has spurred a tripling of Microsoft's stock price in just over four years Kudlow says economic growth could top 4% for 'a quarter or two,' more tax cuts could be coming The one chart that explains Netflix’s stunning comeback US housing starts plunge 12% in June to a nine-month low Aerospace titans Boeing and Airbus top $110 billion in orders at Farnborough Target uses Prime Day to its advantage, logging its 'biggest online shopping day' so far this year Billionaire Marc Lasry sees bitcoin reaching up to $40,000 as it becomes more mainstream and easier to trade These are the 10 US airports where you're most likely to be hacked Amazon shares slightly higher as investors await Prime Day results Wreck of Russian warship found, believed to hold gold worth $130 billion A bullish ‘phenomenon’ in bond market is weeks away from fading, top credit strategist says Stocks making the biggest moves premarket: MS, GOOGL, TXN, UAL, NFLX & more Twitter shares up 50% since late April means most upside priced in, analyst says in downgrade EU fines Google $5 billion over Android antitrust abuse Mortgage applications fall 2.5% as buyers struggle to find affordable homes America may not have the tools to counter the next financial crisis, warn Bernanke, Geithner and Paulson Investors are getting spooked as the risk of a no-deal Brexit rises EU expected to fine Google $5 billion over Android antitrust abuse Ex-FBI chief James Comey urges Americans to vote for Democrats in midterm elections Elon Musk apologizes to British cave diver following baseless 'pedo guy' claim Disney, Comcast and Fox: All you need to know about one of the biggest media battles ever Xiaomi shares notch new high after Hong Kong, mainland China stock exchanges reach agreement The trade war is complicating China's efforts to fix its economy European markets set for a strong open amid earnings; Google in focus Hedge fund billionaire Einhorn places sixth in major poker tournament The biggest spender of political ads on Facebook? President Trump Asian stocks poised to gain after Fed's Powell gives upbeat comments; dollar firmer Stocks are setting up to break to new highs Not all FAANG stocks are created equal EU ruling may be too little, too late to stop Google's mobile dominance Cramer explains how Netflix's stock managed to taper its drop after disappointing on earnings Airbnb condemns New York City's 'bellhop politics,' threatens legal retaliation Amazon sellers say they were unfairly suspended right before Prime Day, and now have two bad choices Investor explains why 'duller' tech stocks can have better returns than 'high-flying' tech names Elon Musk is 'thin-skinned and short-tempered,' says tech VC Texas Instruments CEO Brian Crutcher resigns for violating code of conduct Google Cloud Platform fixes issues that took down Spotify, Snapchat and other popular sites Uber exec: We want to become the 'one stop' transportation app 'What a dumb hearing,' says Democrat as Congress grills tech companies on conservative bias Amazon shares rebound, report says Prime Day sales jumped 89 percent in first 12 hours of the event How to put your medical history on your iPhone in less than 5 minutes Investment chief: Watch these two big events in 2018 Even with Netflix slowing, the market rally is likely not over Cramer: Netflix subscriber weakness debunks the 'sky's the limit' theory on the stock Netflix is looking at watch time as a new area of growth, but the competition is stiff Why Nobel laureate Richard Thaler follows Warren Buffett's advice to avoid bitcoin Rolls-Royce is developing tiny 'cockroach' robots to crawl in and fix airplane engines After Netflix plunge, Wall Street analysts forecast just tame returns ahead for the once high-flying FANG group Roku shares rise after analyst raises streaming video company's price target due to customer growth China is investing 9 times more into Europe than into North America, report reveals Amazon says US Prime Day sales 'so far bigger than ever' as glitch is resolved Netflix is on pace for its worst day in two years US lumber producers see huge opportunity, rush to expand San Francisco to consider tax on companies to help homeless Homebuilder sentiment, still high, stalls as tariffs, labor and land drive up costs Powell backs more rate hikes as economy growing 'considerably stronger' Netflix history is filled with big stock declines – like today – followed by bigger rebounds Intel shares get downgraded by Evercore ISI due to rising competition from Nvidia, AMD Petco aims to reinvent the pet store with something you can't buy online Genetic testing is coming of age, but for consumers it's buyer beware Tech 'FAANG' was the most-crowded trade in the world heading into the Netflix implosion, survey shows Netflix weak subscriber growth may indicate a 'maturity wall' that could whack the stock even more: Analyst This chart may be predicting the bull market's demise Wall Street says Netflix's stock plunge is a ‘compelling’ buying opportunity because the streaming giant ‘never misses twice’ Tesla sinks after Musk tweets, again Boeing announces new division devoted to flying taxis Stocks making the biggest move premarket: NFLX, UNH, GS, AMZN, WMT & more Deutsche Bank downgrades Netflix, but says big subscriber miss is not 'thesis changing' IBM is experimenting with a cryptocurrency that’s pegged to the US dollar North Korea and Zimbabwe: A friendship explained Virgin Galactic spinoff Orbit to launch rockets from the UK with space deal Artificial intelligence will create more jobs than it destroys? That’s what PwC says ‘Treasonous’ Trump and ‘Putin’s poodle:' Scathing headlines follow the Trump-Putin summit China’s fintech companies offer ‘enormous’ opportunity, investment manager says Trump's performance at summit with Putin was 'unprecedented,' experts say Walmart and Microsoft link up on cloud technology as they both battle Amazon European stocks seen mixed amid earnings; Fed’s Powell to address Congress How I knew I should quit my day job and run my start-up full-time: Viral website founder China's stocks have been trounced, but the trade war may ultimately be good news for those shares Billionaire tech investor Peter Thiel bets on crypto start-up Block.one Asian shares subdued open after mixed close on Wall Street; energy stocks under pressure Amazon cloud hits snags after Amazon Prime Day downtime Netflix isn't doomed by one quarter unless people start questioning the long-term investor thesis Tech stocks set to sink on Tuesday after rough evening for ‘FANG’ Netflix plummets after missing big on subscriber growth This wristband lets humans control machines with their minds The U.S. has a rocky history convincing Russia to extradite computer criminals Amazon suffers glitches at the start of Prime Day Jeff Bezos is now the richest man in modern history 'The United States has been foolish': Read Trump and Putin's full exchange Goldman Sachs recommends these 5 highly profitable companies — including Nvidia — to combat rising inflation Goldman Sachs releases 'tactical' stock picks for this earnings season Three red flags for Netflix ahead of its earnings report The bond market may be raising recession fears, but don't expect one anytime soon Cramer: Banks are 'making fortunes' but are still as hated as they were during the financial crisis Putin told Trump at summit: Russia never meddled in US election

Technology

'Ponzi scheme': Co-founder of one of China's top tech firms attacks LeEco

Embattled Chinese internet conglomerate LeEco has been branded a “Ponzi scheme” in an online comment made and endorsed by some of the country’s leading lights in technology.

The debt-ridden group of technology companies founded by billionaire Jia Yueting declined to comment on the scathing critique posted by Tencent co-founder Zeng Liqing, and “liked” by the company’s chairman Pony Ma Huating, and Xu Xiaoping, one of China’s foremost angel investors.

“It [LeEco] is obviously a Ponzi scheme. You don’t belong in the investment market or entrepreneurial world if you can’t see that,” wrote Zeng, co-founder and advisor emeritus at Tencent Holdings, one of the biggest tech companies in the world.

His damning appraisal was made at the weekend in a post on WeChat, Tencent’s ubiquitous social media app. Ma and Xu later “liked” the post.

When contacted by the Post about Zeng’s remark, Chen Xuanyi, a spokesman for LeEco, said the company had “no comment” to make.

The latest blow to LeEco – once a high-flying technology empire with a bright future – comes as it battles to stay afloat amid a mountain of debt, huge losses and court orders freezing its assets.

Its crisis has spilled into its Shenzhen-listed arm, Leshi Internet Information & Technology Corp, which said on Tuesday its shares will remain suspended for up to another three months.

In a statement to the bourse before market opening on Tuesday, Leshi said it was extending a freeze on share trading which has been in place since April. It said it plans to push forward with a “major asset restructuring plan”, which could pave the way for the injection of LeEco’s film production affiliate, Le Vision Pictures, into the listed Leshi business.

But some analysts felt the challenges facing Leshi and its parent is too big and wide-ranging to be averted by the restructuring cited in the statement.

“It doesn’t matter whether or not Le Vision Pictures can be injected into Leshi in the end. What matters most is how Leshi can turn around its business, which is making big losses, and how it can regain momentum, given all the bad news regarding LeEco,” said Hu Jiaming, a Shanghai-based analyst with Capital Securities.

More from the South China Morning Post :
Leshi picks new board without its founder, as picketing debtors disrupt shareholders’ meeting
LeEco chief steps down from troubled unit to focus on auto dream
Microsoft, Baidu to collaborate on autonomous driving

Leshi estimated its first-half losses in 2017 at between 636.7 million yuan (US$94.2 million) and 641.7 million yuan, a dramatic swing from profit of 284.4 million yuan in the same period a year ago, according to a filing on Friday to the Shenzhen stock exchange. The company attributed the loss to declines in customer loyalty, advertising revenue, terminal sales and membership fees.

Leshi’s trading has been suspended since April 17. The extension of that freeze is expected to buy Leshi some time to cope with the unprecedented challenges facing its cash-strapped parent company.

Having started out as a Netflix-style video streaming service, the Beijing-based LeEco later positioned itself as an Apple slayer and Tesla challenger by making expensive forays into manufacturing smartphones and televisions, and electric car development. But the rapid expansion soon began to drown the company in debt.

Many of Jia’s assets have been frozen by court orders as creditors encountered difficulties in getting their money back.

However, not everyone agrees with Zeng’s assessment of how the company operates. In response to the Ponzi scheme accusation, Sun Hongbin, chairman of Sunac China, who poured in 15 billion yuan to bail out Jia’s LeEco, urged the public to be more tolerant towards “failure”.

“Jia is still young,” he said on Sunday in a WeChat post. “We should support the entrepreneurial spirit [of Jia].”

Sun, along with Leshi CEO Liang Jun, and the CEO of LeEco’s movie arm, Zhang Zhao, were installed as the new directors in Leshi’s boardroom by shareholders at a meeting on Monday after Jia resigned as chairman in early July.

Leshi is due to choose its new chairman on Thursday. There is high expectation that Sun will replace Jia in that role, but he told mainland media on Tuesday that he has little interest in the position.

“They [Leshi] are a small business, while Sunac is a big business worth hundreds of billions yuan,” he was quoted as saying by sina.com.

Source: Tech CNBC
'Ponzi scheme': Co-founder of one of China's top tech firms attacks LeEco

Comments are closed.