LeEco’s Financial Issues Delay Payments to US Employees, Hold Up Vizio Acquision
LeEco’s financial issues haven’t been a secret to the community, but it seems as if this trouble has extended to a much deeper level as of late. LeEco was seemingly on top of the world as they expanded beyond streaming content in China, started offering more products than just TVs and rebranded themselves from LeTV to LeEco. The company planned a major expansion into India last year in April and then opened their own headquarters in the United States that same month.
We often hear about smartphone companies from China and India wanting to expand to the United States. But it is quite rare that it actually happens because most people in the US buy their phones from wireless carriers and they are very strict on which devices they sell in their stores. This didn’t seem to phase LeEco in the slightest since days after they opened their HQ in San Jose, they went and purchased over 48 acres of land from Yahoo for additional expansion.
It was as if LeEco could do no wrong and that their cash supplies never ended. That is, until they ran out as they “grew too fast” and the CEO had to publicly confirm they were, in fact, dangerously close to running out of it. LeEco was actually able to get an influx of cash that many had hoped would have solved the issue. However, since then it has been reported that they have fired most of their staff in India, they’re trying to sell that same piece of land they bought from Yahoo, and they’re now having to delay payments to their United States employees.
The bad news isn’t stopping here either as people “familiar with the matter” are telling Bloomberg that the $2 billion acquisition of Vizio is “being held up by tighter controls on Chinese currency outflows.” Multiple high profile employees on the US side have left and some current employees are saying year-end bonuses have yet to be paid as well. It’s unclear exactly how this will end for LeEco, but it certainly doesn’t seem as if they’ve been able to get back on their feet yet.Source: Bloomberg