With the suspension of listing for more than three months, Leeco has once again become the focus of the market.

On the morning of August 29th, the FF issued an official statement saying that Mr. Jia Yueting has repaid more than $3 billion in domestic debt in various ways over the past two years, and that the debt repayment trust fund was set up to solve the debt problem as soon as possible. However, the good news was washed away by Leeco's loss of 10 billion yuan before it became hot.

Leeco's semi-annual report shows that the company lost 10.046 billion yuan in the current period, mainly due to the provision of liabilities of more than 9.8 billion yuan. Two independent directors of the company said that due to the combined impact of Letv Sports and Letv Yun case, there were major doubts about the company's sustainable business ability, so they were unable to express their opinions on this semi-annual report.

For the 280000 shareholders of Leeco, there is no doubt that it will make things worse and send a big thunder! It is worth noting that in just two and a half years, Leeco lost 28.02 billion yuan. Specifically, it lost 13.878 billion yuan in 2017, 4.096 billion yuan in 2018 and 10.046 billion yuan in the first half of 2019.

After the suspension of listing for three months, on the one hand, Jia Yueting paid US $3 billion in debt, and on the other, Leeco cried that "did not get any cash because of the debt solution." what will happen to Leeco?

Letv lost 10 billion yuan online for half a year.

There are losses in the company year after year, and Letv makes a lot of losses. On the evening of August 29th, Leeco released its semi-annual report in 2019. After a large amount of 9.8 billion yuan in debt, Letv's half-year loss reached 10.046 billion yuan, down 810.08% from the same period last year, which shocked the market.

According to the listed companies that have disclosed the semi-annual report, a total of 382 companies are in a state of loss, 89 have lost more than 100 million, and four companies such as Jianrui Woneng, Eagle Retreat, * ST Shencheng and Jinzhou Cihang have lost more than 1 billion, but none of them have reached the 2 billion level. Leeco's loss of 10 billion yuan is currently second to none in the A-share market.

According to the semi-annual report, Leeco's operating income in the first half of 2019 was 254 million yuan, down 74.75% from the same period last year; deducting non-net profit was-348 million yuan, an improvement over the same period last year. However, after the loss of Lerong letter control, Leeco's operation is still in a state of decline.

Specifically, of the 254 million yuan of operating income of Leeco and its subsidiaries, the operating business (advertising business and payment business) generated a total of 170 million yuan, accounting for 67.10%; copyright-related business income and TV drama distribution related income 9 million yuan, accounting for 3.41%, telecom value-added services income 49 million yuan, accounting for 19.31%.

With regard to the decline in revenue, Leeco said that the main reason for the change is that the company lost control over Lorong at the end of 2018, and its main businesses such as the sale of new hardware are no longer included in the merger of listed companies; in addition, the company's brand reputation has continued to suffer in recent years, and the company's advertising, membership and distribution revenue have continued to decline compared with the same period last year.

In the first half of 2019, Leeco's operating costs, sales expenses, management expenses and R & D expenses totaled 316 million yuan, and the cost decreased. Leeco said that during the reporting period, the management tried its best to adjust the business model, improve operational efficiency and control costs, resulting in a significant reduction in daily operating costs, CDN expenses and labor costs, but did not reverse the company's persistent operating losses during the reporting period.

In addition, the risk of huge losses caused by illegal guarantees is the core issue of Leeco's losses of 10 billion yuan. Leeco's illegal Letv sports guarantee case has been arbitrated by Letv Sports 18 investors against the company, of which 8 arbitration cases have been issued arbitration results and lost, and the other 10 arbitration cases are still under trial. After fully evaluating the outstanding arbitration results and the possibility of potential future litigation, based on prudent considerations, the liabilities of Letv Sports and Letv Yun cases are estimated to be more than 9.8 billion yuan.

Leeco made it clear that under the background of failing to comply with the examination and approval, examination and signing procedures of listed companies stipulated in the Company Law, articles of Association and other laws and regulations, and the signing of contracts by unauthorized agents of listed companies, the then management, as the contractor, signed the contract beyond the authority of the agent and caused huge economic losses to the company, which was the main reason for the company's huge losses in this period.

Prior to this, Leeco issued a number of arbitration progress announcements one after another. Leeco said that if listed companies are ruled against illegal guarantee cases, it is likely to cause listed companies to bear huge debts that cannot be resolved. Listed companies still insist on and step up efforts to recover debt repayment from major shareholders and their related parties, requiring major shareholders and their related parties to be responsible for the situation in which the company is unable to move today and to take remedial measures.

FF responded to rumors that Jia Yueting would step down.

Recently, the news about "returning to Boss Jia next week" broke out one after another. On August 28, according to foreign media reports, Faraday will not only rely on recent emergency financial assistance to get the electric vehicle plan back on track, but is embarking on a restructuring plan. Jia Yueting, the controversial chief executive, will resign after the restructuring.

Jia Yueting is said to have been trying to solve the company's and his own debt problems and plans to set up a trust fund (paid by his future Faraday shares) to repay creditors. Perhaps the reason for this is that he believes that the future listing of the company may bring him enough income to pay off his debts. In addition, Jia Yueting will also sell his own shares in an unspecified number.

Faraday will respond quickly in the future. On the morning of August 29th, Faraday issued a "statement on reports on FF promoting changes in the top governance structure" on official account. Although he did not give details about Jia Yueting's direction, he still spoke highly of the controversial CEO in his announcement.

According to the statement, FF has been promoting changes in the company's top-level governance structure since the end of last year, and has officially entered the implementation stage, and relevant details will be released in the near future. Through this reform of the governance structure, more and more talents will join us.

In addition, FF also said that at the strategic level, the Internet ecological model created by Mr. Jia Yueting, founder and CEO of FF, a decade ago is still crucial to the long-term development of FF. Mr. Jia Yueting's dream vision and strategic foresight have given FF the gene of change; his layout in business model innovation has also established FF's differentiated competitiveness; at the same time, it will also continue to promote FF to achieve long-term strategic goals in the field of product technology innovation and user ecological innovation.

In response to the trust fund reported by foreign media, the "statement" affirmed that Mr. Jia Yueting has repaid more than 3 billion US dollars of domestic debt in various ways over the past two years, and the purpose of the establishment of the debt repayment trust fund is to solve the debt problem as soon as possible.

For the news that "Boss Jia pays back money", the market is quite saddened. Many investors have left messages that if Leeco is "still there", there will be another wave of rising market tomorrow. However, after Letv's half-year online results were announced that night, even if the company was not in a state of suspension, this wave of good news would be completely overshadowed by major bad news.

The problem of major shareholders is still unsolved.

In a legal sense, Leeco does not belong to Jia Yueting for a long time. However, Leeco admitted in its semi-annual report that there is still a risk of recovery of receivables from major shareholders and related parties.

In 2017 and before, Leeco formed a large number of related receivables and prepayments by selling goods, providing services and other business transactions to related parties controlled by Jia Yueting, as well as surrogate fees. Leeco said that so far, most of the related receivables have not been recovered. As of December 31, 2018, the outstanding balance of major shareholders and their actual controlling enterprises to the merger scope of listed companies has reached about 2.8 billion yuan.

On the one hand, Leeco has a large number of problems such as non-payment of arrears to upstream suppliers, non-payment of debts on schedule, and a large number of lawsuits and potential lawsuits; on the other hand, related arrears lead to extremely tight cash flow of Leeco. At the same time, the market brand and the company's credit system have been greatly affected, the operation has been seriously hindered, and operating income and net profit have dropped sharply. At the end of 2018, Leeco's net assets were negative, causing the company to suspend listing risk.

Leeco said that since August 2018, it has held many negotiations with major shareholders and related parties, due to the lack of agreement on the key points of debt repayment of related parties, and the landing and implementation of the solution depends on the will and actual implementation of the major shareholders. So far, the major shareholders and their related parties have not come up with a complete and enforceable debt treatment plan, and the listed companies have not received any cash as a result of the debt solution.

As for the semi-annual report released on August 29th, Zheng Lu and Wang Leirang, two independent directors of the company, said that due to the comprehensive impact of Letv Sports and Letv Yun case, there were major doubts about the company's sustainable operation ability, so I was unable to comment on this semi-annual report.

In fact, after Jia Yueting went abroad and Sun Hongbin retreated, the elders of Leeco have retreated in turn. From May to July this year, a total of six "Dong Jangao" left or resigned for personal reasons.

At present, Leeco is headed by "post-85" Liu Yanfeng. However, according to his resume, his work experience is so weak that he only announced that he once worked in Hebei Jiaxing Tesco Technology Co., Ltd from 2017 to January 2019, and the rest, such as education and qualifications, are missing. After the departure of the secretary of the board of directors and the chief financial officer, the young boss currently holds three posts, which is rare in listed companies.

On May 13 this year, Leeco was suspended from listing on the Shenzhen Stock Exchange because of negative net assets. Leeco will terminate listing trading under one of the following circumstances:

1) failure to disclose the first annual report after the suspension of listing within the statutory disclosure period

2) the audited net profit in the first year after the suspension of listing or the net profit after deducting non-recurrent profit or loss is negative.

3) the audited net assets at the end of the first year after the suspension of listing is negative.

4) the first annual financial and accounting report after the suspension of listing is an audit report with reservations, inability to express or negative opinions.

5) failed to file an application for resumption of listing within five trading days after the disclosure of the first annual report

6) the application for resumption of listing has not been accepted or the application for resumption of listing has not been approved

7) the company has been publicly condemned by the exchange three times in the last 36 months

8) the company is forcibly dissolved according to law or declared bankrupt by the court.

At present, after courageously setting aside 9.8 billion debts in the first half of the year, Leeco's full-year performance may be difficult to recover. At present, Leeco's net assets belonging to shareholders of listed companies are-13.089 billion yuan, and the annual reports from 2017 to 2018 are respectively unable to express their opinions and reservations.

In addition, Leeco is being filed by the Securities Regulatory Commission for investigation on suspicion of illegal information disclosure. if the investigation results involve illegal acts such as illegal disclosure of major information, Leeco also faces the risk of terminating the listing.

Once the first share of the gem has already stepped off the altar, how about the future of Leeco? The market will continue to pay attention.