Quick Take: Mutual Funds Feel Pinch in LeEco Fall
(Beijing) — The fall of beleaguered LeEco is biting into the mutual funds that have invested in its listed unit.
Ten major Chinese mutual funds have recently slashed the value of their holdings of Shenzhen-listed Leshi Internet Information & Technology Corp. by about one-third, according to the funds’ public announcements. Some of the funds that also bought shares in private placements said there could be substantial write-downs of their respective investments.
These funds now value Leshi at 20.13 yuan ($2.96) to 22.37 yuan per share, according to the announcements. Leshi last traded at 30.68 yuan per share on April 14 and hasn’t been traded since. Leshi’s privately placed shares were sold at 45.01 yuan per share in August.
Once a darling of investors, LeEco’s aggressive expansion strategy has led to a cash crunch. Unable to pay back loans, a Shanghai court on July 4 froze 1.2 billion yuan of assets owned by LeEco subsidiaries and LeEco founder Jia Yueting. Nearly half of Leshi’s shares are frozen, as are 99.06% of the shares held by Jia.
Two days later, Jia stepped down from his role as the chairman to concentrate on parent company LeEco’s new-energy car division.
In August, Leshi raised 4.8 billion yuan through private placements to three firms and one individual. Caitong Fund Management Co., Harvest Fund Management and China Post & Capital Fund each subscribed to 20 million to 40 million shares. Their combined losses already top 1 billion based on Leshi’s last trading price.
Contact reporter Liu Xiao (email@example.com)
- 1In Depth: Bailouts Multiply as Pressure Mounts to Stabilize China’s Housing Market
- 2Five Things to Know About China’s Scandal-Struck Chip Industry ‘Big Fund’
- 3Opinion: The Two Weaknesses of China’s Economy
- 4Cover Story: The Challenges Ahead for China’s Digital Yuan
- 5Weekend Long Read: What Challenges Await Singapore’s New Leadership
- 1Power To The People: Pintec Serves A Booming Consumer Class
- 2Largest hotel group in Europe accepts UnionPay
- 3UnionPay mobile QuickPass debuts in Hong Kong
- 4UnionPay International launches premium catering privilege U Dining Collection
- 5UnionPay International’s U Plan has covered over 1600 stores overseas