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LeEco is reportedly trying to sell its Silicon Valley property

20 March, 2017, 13:45 | Author: Nadine Todd
  • Cash-starved LeEco seeks buyer for Silicon Valley land it bought from Yahoo less than a year ago

Reuters claims that LeEco is setup to sell the site which was previously supposed to be the company's Silicon Valley HQ to Chinese developer Genzon Group for $260 million.

LeEco may not be around in the US for much longer - the company's big attempt to make a name for itself here seems to have failed. The firm, which has had its sites set on a broad range of businesses from electric cars to streaming video, bought the property for $250 million past year from Yahoo Inc., Reuters said. At the company's United States launch event in October, CEO Jia Yueting said the property "will be an EcoCity that houses 12,000 employees". 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 auto unit.

The previous month, the company had made a big splash hosting its official US launch at the Palace of Fine Arts in San Francisco. The company also did not reveal its intention with the land, but its website shows that Genzon is looking to construct a 140,000-square-meter office building within Silicon Valley named Burlingame Point. When Reuters requested a comment from LeEco, the response was, "We are not yet ready to share plans for the land as we are still in the initial planning phase".

According to Reuters, the Silicon Valley site, dubbed as EcoCity, was part of LeEco's ambitious plans to expand its footprint to the US.

LeEco apparently expanded at a rapid rate previous year and it seems that their rate of expansion has failed to match up with its revenue scale.

Back in January, Jia said that the financing problems of LeEco would be solved in three to four months. It is company policy not to quote numbers upon request as "headcount changes routinely due to additions and/or departures", LeEco said. The company said earlier this month that it had also cut nearly 80 percent of its workforce in India.

The expensive dream of developing luxury electric vehicles by LeEco uses Faraday Future technology, which is a startup in United States funded and controlled by Jia. The conglomerate was able to secure a $2.2 billion capital injection from property developer Sunac China Holdings.

Recently, the luxury electric auto startup said it would have to scale back the size and production volume of its plant that it still has to build in North Las Vegas, Nev.

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