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.