Reports of margin call halt LeEco stock trading, company plans immediate business changes

LeEco has announced that it is setting up immediate changes to its business after its share price fell fast into a deepening trough.

It decided to halt the trade of the stock of Leshi, its original online media company, before Shenzhen’s markets opened on Wednesday. Why? Media spread word that a shock 7.8 percent drop the day before caused a margin call — when a broker asks an investor to contribute more equity into the entity or risk that broker pulling its funds out.

The company said that the figures used by reports were incorrect, but did not comment further.

LeEco is working on raising more funds after its chairman, Jia Yueting, announced that the company expanded too quickly and is facing a cash crunch.

Leshi (formerly Letv) is the only profitable unit of LeEco. The company says trading will resume on its stock as soon as their investigation into its price collapse.

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Jules Wang
Jules Wang is News Editor for Pocketnow and one of the hosts of the Pocketnow Weekly Podcast. He came onto the team in 2014 as an intern editing and producing videos and the podcast while he was studying journalism at Emerson College. He graduated the year after and entered into his current position at Pocketnow, full-time.