LeSports refutes media reports claiming key investors reduced stakes

Live-broadcasting platform LeSports has refuted media reports that investors Wanda Group and Jack Ma’s Yunfeng Capital had reduced their stakes in the company following the financial woes faced by parent LeEco, claiming instead that the holdings were diluted as a result of its second round of financing.

Last week, state-owned publication The Paper reported that Wanda Group had withdrawn its stake in LeSports entirely at the end of 2015, while other investors such as Yunfeng Capital and Beijing’s Prometheus Capital drastically decreased their stakes in November. The report cited LeSports business information records.

According to the report, Yunfeng Capital decreased its stake from 10 per cent to 3 per cent on November 24, the same month that LeEco chief executive Jia Yueting announced in an internal letter to employees that the company was facing an impending cash crunch.

Real estate developer Wanda Group, which led LeSports’ US$122.9 million Series A funding round and owned an 8 per cent stake in LeSports, purportedly withdrew entirely on December 30, 2015, less than a year after LeSports closed its first round of financing.

Beijing’s Prometheus Capital reduced its stake from 11 per cent to just 4 per cent in November.

LeSports chief executive Lei Zhenjian said on Saturday that new investors had come on board during its second round of financing, thus leading to a dilution of shares for investors such as Prometheus and Yunfeng Capital, which is controlled by Ma, executive chairman of Alibaba which owns the South China Morning Post.