Leshi's market value falls by US$308m after share price tumbles 10%
Shares of Leshi Internet Information & Technology dropped today by 10 percent for a fifth day, causing the Shenzhen-listed firm to lose 20 billion yuan (US$308 million) in market value since it resumed trading last week.
Leshi, which used to be the top firm in the Nasdaq-like GEM or Growth Enterprise Market in China, closed at 9.05 yuan today, compared with 0.97 percent of the GEM index.
Leshi’s market value is now 36 billion yuan, a drop from 56 billion yuan when it halted trading.
In the first three quarters of last year, Leshi posted a net loss of 1.6 billion yuan according to latest data.
Leshi is still coordinating measures with debtors and suppliers to “ease liquidity pressure and resume business”, the company said last week. It had halted trading due to heavy debt and asset integration since April last year.
Leshi is considering asking Jia Yueting, the company’s founder and top shareholder, to use the non-listed electric car business to pay back the debt. Jia and his related company still owe 7.5 billion yuan to the listed firm, Leshi said.
Jia, who is now in the United States, is seen as being responsible for the heavy debt after an aggressive business expansion into the electric car and smartphone markets.
Jia is still the top shareholder of Leshi with a 26 percent stake. But his stake is likely to shrink when the share price continues to plunge. This means that Jia will probably lose his controlling stake in Leshi, said analysts.
Sun Hongbin, the chairman of property developer Sunac China, is now chairman of Leshi after Sunac invested about 15 billion yuan in the firm last year.