LeEco may leave Silicon Valley to pave over financial turmoil
LeEco is said to be selling its 49-acre headquarters in Santa Clara, California, Reuters reports from anonymous sources. Such a move would help to shore the Chinese company’s hemorrhaging finances that were incurred from its expansion efforts in India and the United States.
Earlier this year, CEO Jia Yueting had to fend off investor qualms about what was seen as a rash approach to the US market that included an autonomous car spin-off called Faraday Future. Local media reported that a major investor made a margin call of LeEco’s parent company stock in the Shenzhen borse. Plans for the Silicon Valley plot that was acquired from Yahoo! included an “EcoCity” for 12,000 employees. The company’s US initiative was also fueled by a $2 billion acquisition of domestic TV-maker Vizio.
Another Chinese developer, Genzon Group, is in place to buy the property for $260 million, a $10 million premium from when LeEco bought the site. Genzon confirmed that it was involved a bid for the land, but would not elaborate on details while LeEco only said that it was “working on securing a development partner”. It hopes to receive $2.2 billion from properties firm Sunac China Holdings in the next couple of months.
LeEco is said to have cut down its US workforce by around half between May and October of last year and nearly 80 percent of its India operations. Faraday Future has yet to break ground on its proposed factory in Nevada. In the meantime, the company has expanded the retail availability of its smartphones and TVs.