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# LeEco’s Market Value Crashes by $2.5 Billion

August 3, 2017 by Tushar Imade / 0

LeEco, the grappling Chinese conglomerate, might see the market worth of its planned unit drop almost $2.5 Billion. This estimation was displayed from 3 mutual fund shareholders, as the unit expanded a trading suspension.

In individual statements of revaluation, China Post & Capital Fund Management Co. Ltd., Harvest Fund Management Co. Ltd., and E Fund Management Co. Ltd. claimed that they anticipate stakes of Leshi Internet Information & Technology Corp. located in Beijing to witness a sharp inclination of almost 30% as soon as shareholders get the opportunity to respond to new expansions.

Contact with Leshi was not able to made for comment. Jia Yueting, founder of LeEco, gave his resignation letter as chairman of Leshi last week. He had formerly claimed that LeEco had developed too swiftly into electric vehicles and consumer electronics from video streaming, resulting to a financial crunch and freezing of some assets by the court.

Jia also gave his resignation letter as Chief Executive of Leshi during the trading suspension, which Leshi asked for from April 17 owing to probable restructuring. Last week, the company claimed that it might expand the suspension for as long as more 3 Months. The revaluation demonstrates the effect on shareholders of lengthy trading suspensions of China—a foremost fear of foreign shareholders.

“One thing Portfolio Managers dislike is trading suspension,” China veteran and Senior Portfolio Manager at Wells Fargo Asset Management, Anthony Cragg, told the media last week. “You can bear losing cash, but you cannot stand not being able to make a deal. Suspending a share is a big NO.” China Post and Harvest Fund, both with deep exposure to Leshi, in individual statements last week claimed that they will adjust their evaluation of Leshi stakes to 22.37 Yuan, 27% less than their previous pre-halt final cost of 30.68 Yuan.

Last week E Fund claimed that it will re-evaluate shares of Leshi at 28% lower, or 22.05 Yuan. Other main shareholders comprise Penghua Fund Management Co. Ltd., Dacheng Fund Management Co. Ltd., and Guangfa Fund Management Co., according to first-quarter earnings report of Leshi rolled out at the end of April.

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