Cash-starved LeEco seeks buyer for Silicon Valley land it bought from Yahoo less than a year ago
Cash-starved Chinese internet conglomerate LeEco is reportedly looking to sell its 49-acre plot of land in Silicon Valley, less than a year after the company bought it from Yahoo, according to media reports.
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. LeEco bought the land from Yahoo for US$250 million last June.
The site, which LeEco originally purchased to build an “EcoCity” capable of housing 12,000 employees, was meant to become the company’s US headquarters and an “open campus” that would replace its current 800,000 square-feet office in San Jose, according to the company.
Genzon confirmed that it was in talks with LeEco to buy the site, but declined to reveal further details.
A LeEco spokesperson said the company is working to secure a “development partner” but declined to provide further details as the company was still in the “initial planning stage”.
The move comes in the wake of LeEco’s cash crunch late last year. In November, chief executive Jia Yueting wrote in a letter to staff that the firm was rapidly running out of cash due to a “weak capital structure”, and partially blamed the crisis on expensive ventures such as its electric car unit.
The company, which started off as a video-streaming platform but later expanded to produce smart televisions, smartphones and an electric car, has also been plagued by news of debts owed to vendors and suppliers, with several suing LeEco for missed payments.
LeEco’s plight is a far cry from its initial ambitions. In October, the company held an extravagant US launch in San Francisco where LeEco executives stated the US was among one of its most important markets.
Last April, Jia called iPhone maker Apple “outdated”, stating that it lacked innovation while also claiming that LeEco wanted to “surpass Tesla” in the electric vehicle industry.
The company has also reportedly reduced its workforce across the US, with sources telling Reuters that the number of staff in its current San Jose, California office has been cut by as much as half. In October, Jia said the company had more than 500 employees working in the US. LeEco declined to comment on current employee numbers.
Earlier this month, LeEco said it had cut almost 80 per cent of its workforce in India, although it affirmed that it would not be exiting the India market. The job cuts put its India staffing levels “in line with industry benchmarks”, a LeEco spokesperson said, making its headcount in that country comparable to rivals such as Xiaomi and OnePlus.
After being plagued by several months of financial woes, LeEco in January landed a 16.8 billion yuan (US$2.24 billion) round of investment from Chinese property developer Sunac China Holdings, which injected fresh funds into LeEco’s entertainment and hardware businesses.