LeEco is Already Running Out of Cash as It Expands too Quickly


Less than a month ago, LeEco, a Chinese electronics, media, and car company, held a large press event in San Francisco to announce to the country that they had arrived. It was their big moment in which they trotted a bunch of former execs from other well-known companies, showed off a line of products ranging from phones to TVs to Android-powered bikes, and discussed their LeMall shopping experience where you would find those items through flash sales for rock-bottom prices. And then to kick off this week, their co-founder Jia Yueting sent out a letter to shareholders, essentially suggesting that the company expanded too fast and is running out of cash. Woof. 

The letter explained that LeEco “blindly sped ahead, and our cash demand ballooned.” It continued with, “We got over-extended in our global strategy. At the same time, our capital and resources were in fact limited.” That speaks of a leadership disaster with zero vision from this company that wants to be the next big tech giant.

Jia even admitted that their “fundraising ability isn’t strong,” and that the scale of their “external fundraising had trouble satisfying the demands of our rapid expansion.” So they ran headfirst into a whole bunch of new product categories without any sort of ability to raise funding to support them or even raise enough to keep up with that expansion. Seems legit.

At this point, who knows what LeEco does going forward outside of China. Their LeMall store is still open in the US and my guess is that they will continue to sell the limited line of products here. They’ll cut costs where they can, maybe back off of some of their new ventures, and hope for the best, I guess. But what about their vaporware car branch? Yeah, that should be an entertaining story to follow. We’ll know more at CES, I’d imagine, since they want to build their electric Faraday cars in Nevada.

Either way, LeEco arrived briefly, but may already be backing back into a safe zone. We’ll keep you updated.

0 Comment

Leave a Reply

Captcha image


  • 5300c769af79e

    Beachbody Is Shaping Up For Public Cloud

    He's ready to build out private cloud as an alternative, but he thinks some of his legacy applications shouldn't run on it -- these apps really belong in a resilient public cloud infrastructure.In an interview with InformationWeek at Oracle OpenWorld 2016, Frias said his first step will be to build a private cloud infrastructure that looks like Oracle Cloud.
  • 5300c769af79e

    Snowden Designs iPhone Add-On To Thwart Surveillance

    They are empowered NSA whistleblower Edward Snowden and hacker Andrew Huang have designed an add-on device for iPhone 6 that would alert the user if they are being tracked.Former National Security Agency (NSA) contractor and government whistleblower Edward Snowden is collaborating with well-known hacker Andrew "Bunnie" Huang to create an iPhone add-on device designed to alert users if they are being spied on.
  • 5300c769af79e

    Facebook: We Don't Spy on You Via Your Phone's Mic

    The Independent, however, last week interviewed University of South Florida mass communication professor Kelli Burns, who told the newspaper that she tested the theory by talking about specific topics within earshot of her phone, then found relevant ads on Facebook.It's possible, of course, that Burns had recently searched for the same subjects.
  • 5300c769af79e

    Pokemon GO Update With 'Buddy' Feature Now Rolling Out

    For all of you anxiously awaiting the ability to have a “buddy” Pokemon, the update that enables this feature is now available for Pokemon GO.With this buddy system, trainers need only to walk varying distances to earn candy for their buddy Pokemon.