LeEco Is Selling off Silicon Valley Site Because of a Cash Crunch

Evolving its business Le Eco is one of China's most ambitious companies that grew from a Netflix-like video website to a business empire spanning consumer electronics to cars. — Reuters

On Friday, Reuters reported that LeEco plans to sell the land to Chinese real estate developer Genzon Group for US$260 million, citing unnamed sources.

Even as the company continues to struggle with its finances, LeEco is now reportedly looking to sell its 49-acre space in Silicon Valley which it had allocated for its United States headquarters. Silicon Valley property less than a year after buying it from Yahoo Inc, sources said, in what is the latest effort by the firm to ride out a cash crunch. Genzon did confirm to Reuters that it's been in talks to buy the site. We already knew that LeEco was suffering some money issues, as admitted by Yueting in an email to employees in November.

But less than a month prior to the letter, amid much fanfare at LeEco's official USA launch at the Palace of Fine Arts in San Francisco, Jia had outlined plans to build its North America headquarters at the Silicon Valley site. The company also did not reveal its intention with the land, but its website shows that Genzon is looking to construct a 140,000-square-meter office building within Silicon Valley named Burlingame Point. "LeEco has been working to identify additional investors as well as a development partner but we have nothing to announce at this time", LeEco told TechCrunch in response to the Reuters report. Insider reports reveal that the company has cut down its team by almost 50% and has no more than 500 employees in its USA offices. As Jia pointed out, 500 United States employees, but LeEco was earlier cited by a Chinese media saying that they had 1000 U.S. employees past year, which included their super auto research personnel. LeEco declined to comment on current employee numbers.

LeEco got a $2.2 billion investment from the property company Sunac China Holdings in January, but that money was earmarked for LeEco's entertainment business and not its languishing auto upstarts, which have yet to complete any production-ready vehicles or a factory in which to build them.

However, the outlook remains unclear after Faraday said it was scaling back production plan at a factory it has yet to build in Nevada.

LeEco's flagship unit, Leshi Internet Information and Technology Corp Beijing, saw a plunging in their shares as well of about 25% over the period of five months.



Other news