Deal by Chinese Tech Company LeEco for Vizio Dies
BEIJING — An ambitious Chinese technology giant with a French-sounding name burst into the United States last year with dreams of disruption.
Called LeEco, it offered to buy Vizio, one of the biggest names in American big-screen televisions, for $2 billion. Its founder backed an American start-up that showed off a sleek electric concept car. An affiliate was gearing up for the release of “The Great Wall,” having helped to finance the $150 million film that starred Matt Damon and was intended to show that China could make its own Hollywood-style blockbusters.
这个名叫乐视控股(LeEco)的公司出价20亿美元欲收购美国最大的大屏幕电视公司之一Vizio。乐视的创始人还投资了一家美国初创公司，展示了一辆时尚的概念电动车。它的一个分公司当时正在为电影《长城》(The Great Wall)的发行做准备，该公司为这部耗资1.5亿美元、由马特·达蒙(Matt Damon)主演的电影投入了资金，旨在表明中国可以制造自己的好莱坞风格大片。
Today, LeEco is in retreat. On Tuesday, it said the $2 billion Vizio deal would not go through, citing unspecified “regulatory headwinds.” The electric car venture, Faraday Future, faces lawsuits from contractors who say they haven’t been paid. “The Great Wall” bombed in the United States, though it did well in China.
China, home of the world’s largest group of internet users, has become a global technology leader. Its internet companies are some of the biggest in the world. Silicon Valley studies how Chinese consumers use their smartphones for everything from ordering takeout to taking out loans.
LeEco shows how the Chinese tech world can also get ahead of itself. Businesses like ride-hailing, bike-sharing and delivery services have expanded quickly, sometimes leading to dramatic retreats. In a country flush with optimistic venture-capital investors and a lot of other cash sources, money often goes to the company that makes the grandest prediction — putting intense pressure on that company to follow through.
LeEco’s vision was certainly grand. As a holding company with a stake in the publicly traded Leshi Internet Information & Technology Corporation, LeEco was once just one of a number of Chinese online video streaming companies. But its founder, Jia Yueting, invested in a dizzying array of new business lines — movie production, smart TVs and phones, sports broadcasting and goods, electric cars and car sharing, cloud computing and online finance.
The conglomerate embarked on a string of debt-financed acquisitions, including stakes in the Chinese electronics companies Coolpad Group and TCL Multimedia. LeEco also acquired the car sharing start-up Yidao Yongche.
该集团开始进行一系列债务融资收购，其中包括中国电子产品生产商酷派集团(Coolpad Group)和TCL多媒体(TCL Multimedia)的股权。乐视还收购了共享汽车初创公司易到用车。
Mr. Jia adopted a high profile. He publicly pledged to take on Apple and Tesla and began wearing black hoodies and black long-sleeve shirts like the tech icons of Silicon Valley, adopting just the initials YT in contacts with his employees. Regarding Apple, last year he said the iPhone maker’s pace of innovation had become “extremely slow.”
The year before that, Mr. Jia posted an image to one of his social media accounts comparing Apple to Hitler, though he later apologized.
LeEco — a name that links its Chinese name Le with the word ecology, representing Mr. Jia’s dream for a range of interconnected gadgets and services — also began looking abroad.
In the United States, Mr. Jia made an undisclosed investment in Faraday Future, a Los Angeles-based electric car start-up that later announced a $1 billion car plant in North Las Vegas. LeEco acquired Dichotomy, run by the Hollywood insider Adam Goodman, and a LeEco affiliate, Le Vision Pictures, said it would cofinance “The Great Wall.” The acquisition of Vizio, one of the largest sellers of televisions in the United States, was set to give LeEco a solid foothold in the world’s largest consumer market.
在美国，贾跃亭对位于洛杉矶的电动汽车初创公司Faraday Future进行了具体数额未公开的投资，后来该公司宣布将在北拉斯维加斯建造一个价值10亿美元的汽车厂。乐视收购了由好莱坞内部人士亚当·古德曼(Adam Goodman)经营的公司Dichotomy，乐视的分公司乐视影业称它将联合为《长城》融资。Vizio是美国最大的电视销售商之一，收购这家公司将使乐视在世界上最大的消费市场站稳脚跟。
Those dreams sent the shares of Leshi Internet soaring in 2015, and made Mr. Jia one of China’s richest men on paper, according to the Hurun Report, which tracks the country’s wealthy.
But the pace of deals began to take a toll. A rising group of Chinese companies, including the longtime telecommunications giant Huawei Technologies, ramped up competition in smartphones, while LeEco faced well-funded rivals in areas like video streaming.
Mr. Jia acknowledged last fall that his LeEco conglomerate was overextended and was running out of cash. At a meeting in November to reassure investors, he stressed the importance of the American market and said LeEco offered a way to change minds about China.
“They think China’s companies are copycats, plagiarists, incapable of big innovation,” he told the audience in Beijing, according to a publicly filed transcript of the event, acknowledging that further debt financing would be harder to come by. “On the contrary, this is a country with heroic companies.”
In the first nine months of 2016, the conglomerate’s mobile affiliate alone posted an $820 million loss on $1.6 billion of revenue, according to investor materials seen by The New York Times.
In January, the conglomerate appeared to secure a lifeline with a $2.2 billion investment from Sunac China, a real estate developer, which purchased minority stakes in three of the conglomerate’s more stable businesses, including the smart TV affiliate Leshi Zhixin, Le Vision Pictures, and Leshi Internet.
Other businesses face challenges: Electric cars are years away from mass production, and the smartphone market remains intensely competitive.
It is not clear whether LeEco’s retreat on Vizio was related to its financial problems. Chinese officials, worried about money moving out of the country, have grown skeptical of some foreign acquisitions, even as they welcome others. A spokeswoman for LeEco declined to offer details on the deal beyond an emailed statement that said LeEco and Vizio would form a collaborative partnership instead.
In a California state court in Los Angeles, Faraday Future has faced lawsuits by five contractors and others over payment and contract issues, though three of the suits have been settled or dismissed. Faraday Future has said it will defend itself against suppliers that failed to honor their contractors, and that it will still build the North Las Vegas plant, albeit in phases.
在洛杉矶的加利福尼亚州法院，Faraday Future先后面临五个承包商和其他人的付款及合同问题诉讼，尽管其中三宗已得到解决或驳回。Faraday Future表示，它将保护自己，与那些不遵守承包协议的供应商做斗争，并且仍将建设北拉斯维加斯的工厂，只不过要分阶段进行。
LeEco’s own suppliers have grown antsy. On Monday in Beijing, a dozen people who said they worked for unpaid suppliers held a sit-in in the lobby of LeEco’s office tower. They were escorted into the company’s offices before they could be interviewed.
In January, workers from Tianjin Hong Furui Electronics, a company LeEco contracted for after-sales cellphone repairs, sat on a patch of grass in front of LeEco’s office tower to protest.
“They delayed our payments four or five months,” said Jacky Yu, an employee in Hong Furui’s sales department, adding that the bill totaled roughly $850,000 to $1 million.
By March, the company had been paid and declined to comment further.
The LeEco spokeswoman said the company had already solved some payment problems and was working on others.
“LeEco’s earlier financial problems have already been systematically resolved,” she said in the emailed statement. “Previous supplier problems are being resolved through multifaceted and innovative methods.”