Leshi Internet Information and Technology, once dubbed “China's Netflix”, ended its nearly 10-year run as a listed entity on Monday, with its market value sinking 99.6 per cent from its peak five years ago.
The video-streaming service provider marked its exit unchanged at 0.18 yuan, giving it a valuation of 718 million yuan (US$102.7 million), a far cry from 170 billion yuan in 2015. Some 121 million yuan worth of shares changed hands.
“Once the company’s stock is delisted, it cannot re-list on the bourse,” Leshi said in a statement late on Friday. The company was founded by embattled Chinese entrepreneur Jia Yueting, who last year filed for Chapter 11 bankruptcy protection in the US.
It entered delisting proceedings on June 5, after reporting huge losses for a third consecutive year in 2019 and crossing the threshold for delisting. It debuted on ChiNext, a technology board for Chinese start-ups on the Shenzhen Stock Exchange, in 2010.
Leshi, once seen as a potential Chinese technology titan, is part of embattled Chinese conglomerate LeEco founded and headed by Jia. Various companies controlled by Jia owed Leshi some 7.53 billion yuan.
Once dubbed “China's Steve Jobs”, he had envisioned building an empire to rival US technology giants Apple, Tesla and Amazon.
Jia’s LeEco was also the parent of electric car start-up Faraday Future, which was keen to take on rival Tesla. But an aggressive expansion plan left the group cash-strapped.
Jia filed for Chapter 11 bankruptcy last October. He said at the time that he had repaid US$3 billion worth of debt while another US$2 billion was outstanding and that he controlled a 33 per cent stake in Faraday.
On July 2, California-based Faraday, which calls itself a “shared intelligent mobility company”, said Jia’s bankruptcy reorganisation procedures have been completed and a trust would be established to compensate Leshi shareholders.
“With the implementation of a partnership system at Faraday as well as that of my bankruptcy restructuring plan, I no longer own shares in the company,” Jia said in a post on Chinese social media platform Weibo.
Leshi’s shareholders can be compensated by the trust if certain conditions are met, he said without elaborating.
Leshi said in a stock exchange filing on July 2 that it had not received any compensation plan or arrangement from Jia or his debt restructuring team, adding it was impossible for Leshi to determine whether getting compensation from the trust was feasible.
Leshi’s net loss for last year widened to 11.3 billion yuan from 4.1 billion yuan in 2018. Revenue slumped 69 per cent to 490 million yuan. In 2017, it posted its first annual loss of 11.6 billion yuan.
Sunac China Holdings, one of the mainland’s largest developers, spent US$2.2 billion to buy an 8.6 per cent stake in Leshi through a share placement in 2017, becoming its second-largest shareholder.
Sunac also dispatched personnel to help reorganise the company, but failed in its bid to bail it out.
In the late 1930s, the Federal Reserve Board refused to admit it was a government institution. So Patman convinced the District of Columbia’s government to threaten foreclosure of all Federal Reserve Board property; the Board quickly produced evidence that it was indeed part of the federal government.