The story of Chinese billionaire Jia Yueting’s ‘Fantasyland’ and the crumbling of his ‘LeEco’ castle is known to all. Within months of his misadventurous trip to the Indian and the US markets with ‘super phones’, ‘super TVs’, and ‘better-than-Tesla-electric-cars’, the whole ecosystem of China’s one of the fastest-rising billionaire crumbled like a pack of cards.
However, LeEco is history now. But as they say, history repeats itself.
Coolpad, the smartphone company that Jia Yeiting is heading now, with over 28% stake, seems to be going the LeEco way.
All is not well at the top deck of the Coolpad Group since LeEco founder Jia Yeuting took over the full control of the company. Many of the top brass have quit their job in quick succession, the latest one being the company’s CEO.
Liu Jiangfeng, the CEO of Coolpad resigned last week and as was anticipated, both the company as well as Liu were tight lipped abpout the development and did not offer a statement on why Liu quit the company.
In august 2016, exactly a year back, Jia became the Chairman of Coolpad Group replacing Coolpad founder Guo Deying, and appointd Liu as the CEO. Liu was poached from Huawei where he was serving as President of its Honor unit.
Within days of Jia and Liu taking the full control of Coolpad as Chairman and CEO respectively, the company started reshuffling the management team and many senior executives, including Coopad’s former president Li bin, vice president Cao Jingsheng, former vice president Xu Yibo, left the company.
Not only that, in March this year, Jia appointed LeEco’s CFO Zhang Wei as Coolpad’s executive director. With this Jia and his former LeEco colleagues got the complete control of the functioning of the Coopad Group. Out of total six executive directors, five were from LeEco and onne from the old Coolpad Group.
The current financial situation looks more worrisome than the leadership crisis or the company’s vision glaucoma.
A glance at Coolpad’s annual results for 2016 will show you the disturbed state of affairs at the company. The company’s revenue plunged to almost half to about HK$ 8 billion in 2016 from HK$15 billion in 2015. The firm’s bottomline looks more gory.
Coolpad Group posted a first-time loss of HK$ 4 billion in 2016 from a net profit of HK$ 2.2 billion a year ago.
To make the matter worse, the company’s share trading has been suspended since April this year as the company failed to comply with the listing norms of HongKong bourses.
In July this year a local bank had sued Coolpad’s subsidiary, Yulong Computer Communication (Coolpad smartphones fall under this subsidiary) of $11.9 million for default of payment of a loan. The Ping An Bank said it sued the company as the financials of the company has deteriorated in recent times.
As recent as on August 15, the company informed the HongKong exchange that the company is currently operating without improvement and remained in a state of sustained losses.
In December 2016, Coolpad’s stok price fell to the lowest since 2012.
Coolpad Group, one of the oldest manufacturers of mobile phones including smartphones, had agreed to join hands with LeEco as the company had hoped Jia’s company would be a major customer for its smartphones when LeEco was dream-selling of an ecosystem of connected devices. With LeEco crashed in a year, that dream remained unfulfilled and does not seem to be happening anymore.
Besides, the company has lost grounds to local rivals in China as well as India. In both these countries, its local rivals like Huawei, Lenovo and Xiaomi are gaining grounds, and Coolpad has already been pushed back, from where its almost impossible for the company to gain new grounds.