BEIJING: Shares in the main unit of beleaguered Chinese technology conglomerate LeEco sank on Wednesday after returning to the Shenzhen stock market following a nine-month absence.
Trading in Leshi Internet Information and Technology halted after the shares instantly tanked to the daily limit of 10 percent, with analysts expecting the pattern to continue for many trading days to come.
Leshi Internet is the main publicly traded arm of LeEco, once one of China’s most ambitious companies founded by flamboyant entrepreneur Jia Yueting.
After vowing to take on Apple and Tesla, Jia borrowed heavily and raised money from a wide range of investors to push the conglomerate into smartphones and electric cars and many other business lines, which have failed to bring in any substantial returns.
Jia himself has been summoned by securities regulators back to China from the US, where he is attempting to build electric car company Faraday Future.
In December, with his name on China’s national debtors blacklist that may prevent him from leaving the country if he returns, he sent his wife in his place.
Leshi Internet had suspended trading since April of last year ostensibly over its acquisition of LeEco’s film unit. At the time the company traded at about 32 yuan ($5) a share and boasted a $9.4 billion market capitalisation.
Last week the company admitted the transaction would not go through, propelling it to resume trading this week.
Several Chinese funds that hold the internet company’s shares have marked them down to less than four yuan a share.
Source: Brecorder.com
