Jia Yueting and adventure of a crumbling empire
It’s not always easy being a visionary.
Masayoshi Son this week bathes in the glory of $93 billion in fresh cash, and Elon Musk continues to attract kudos for being, well, Elon Musk. Jia Yueting, on the other hand, is suffering the ignominy of seeing his empire crumble before it was built.
On Sunday, the billionaire’s Shenzhen-listed Leshi Internet Information & Technology Corp. announced Jia would step down as general manager, while staying on as chairman to oversee strategy. The company’s US unit plans to shed almost all its staff, leaving behind a skeleton crew to serve customers who’ve already bought its devices, after missing sales targets by a massive margin.
Failing in the US is a particular blow to LeEco, as the group is also known, because Jia seemed to have his heart set on making a splash there. His company planned to buy California-based TV maker Vizio Inc. for $2 billion, but called that deal off last month, citing “regulatory headwinds.” With its finances unraveling fast, I doubt they’d have been able to afford to close the deal.
Value of failed Vizio deal
Jia himself has Musk-like dreams for electric cars, backing Los Angeles-based Faraday Future, which is building a factory in Nevada (sound familiar?)
But Jia and LeEco may have erred in not being forward-looking enough. For a visionary, his empire remains centered on rather old-school hardware businesses like phones and TVs. The fact that he wanted to buy Vizio, a branded TV maker in an anemic market, tells you something about Jia’s plans.
At the same time, the streaming content unit faces tough competition from China’s biggest internet companies, which have a lot more money and far greater reach. For example, the LeSports division cut 70% of its jobs, according to a QQ.com report last week. And did I mention that LeEco owns a controlling stake in the ride-hailing company Yidao Yongche? Jia should recall what happened to Uber Inc. in China.
If there’s one thing we can take away from the tale of Jia and LeEco, it’s that being a visionary only works when you’ve got a truly unique vision. Bloomberg