The CEO of rising technology company LeEco Jia Yueting on Sunday sought to reassure investors, as concerns over the company's financial situation mount following a slide in its share price that led to a trading halt and speculation about a capital crunch.
Speaking at a business leaders summit in Beijing, Jia admitted that the company faces huge pressure on its cash flow mainly caused by its cellphone business. He claimed that the share price drop last week was orchestrated by competitors who wanted to interfere with the company's restructuring plans, according to an excerpt of his speech published on sina.com.cn.
But despite the pressure, LeEco "will maintain its genes, dreams and ideals and find a unique way," Jia said, before listing the company's plans going forward, including fundraising and research and development.
Jia further stated that LeEco's revenue for 2016 could reach 50 billion yuan ($7.24 billion), compared with the previous year's 18 billion yuan.
LeEco will complete another round of fundraising within a month, after which the company's problems will be resolved "to a certain extent," Jia said, without elaborating on the amount to be raised or other details.
The share price for LETV, the listed unit of LeEco, took a dive on Tuesday, dropping 7.85 percent. LeEco announced Wednesday that it would suspend its shares, citing major disclosures.
The loss on Tuesday brought the company's share price drop over the past five months to 41 percent, according to China Economic Net. The drop further sparked concerns over the company's financials.
Jia on Sunday attributed last week's "temporary and unusual" share price drop to deliberate efforts by competitors to interfere with the company's plans.
According to Jia, though cellphone sales had shown rapid growth and could reach 20 million yuan soon, the supply chain has put "huge pressure" on LeEco's cash flow.
He also said that LeEco will continue its endeavors in areas such as TVs and electric cars, noting that the company is well-positioned for development in such sectors.
