Stellar May Find Itself On a Sinking Boat With LeEco
Stellar Lumens price surged 70%+ overnight for partnering with LeEco. However, the market may be overreacting to the “good” news as LeEco is facing its biggest challenge ever!
XLM price up 70% on btc38
The report by Wired was relayed by 8btc Chinese news first and soon got over 3,000 views . Poloniex and btc38 are the two major exchanges that introduced liquidity to STR and both saw sudden increase of transaction volume of STR. But Chinese are seeing the other side of the coin.
LeEco captured Chinese attention on Wednesday for two things: a picture and the 52-week low price of LeShi stock(SZ:301004), whose trading was suspended from today on due to ” investigation of price fluctuation and asset restructuring issues”.
Leshi (SZ:300104),LeEco’s listed company, stock plunges to 52-week low on 7th Dec screenshot from bloomberg
A picture of LeEco staff lining up to finish dimission procedure was reposted over 2000 times on Weibo and became one of the hottest subjects yesterday.
LeEco staff lining up to finish dimission procedure source: weibo
LeEco’s sports unit cuts 10% of staff amid funding crunch. The picture is a side note to that crisis.
The Shenzhen-listed firm’s shares dropped almost 10 percent and saw its 52-week record low in trading hours yesterday. The shares managed to close at 38.80 RMB per share, or 7.85 percent loss. It’s around 40% offset from its annual price peak of 60 RMB. Earlier rumor has it that Jia Yueting, CEO and Founder of LeEco, put 507.3323 million LeShi shares as equity pledge financing. The liquidation price for the loan is 35.21 RMB. However, the rumor was denied by Jia. If the news is confirmed, more shares could be dumped on the market. As per Ifeng news, the counterparty that accept the above loaning is assessing the potential risk and seeking solution at the moment. LeShi is a major financing vehicle for LeEco to drain capital from the huge Chinese stock market. LeShi announced closure of 4.8 billiion RMB private placements this July at 45.01RMB per share and these shares are locked for one year.
Let’s look at the LeFinance that went partnering with Stellar.
LeEco runs a dedicated online payments and banking company called LeFinance, and this subsidiary is now building services that will use Stellar to move money to and from businesses and customers abroad.
Actually, online payment is never the strong suit of LeFiance. Eui, the customized operation system of LePhone, was upgraded to version 5.8 in July, 2016. The mobile wallet app received more compliant than endorsement. The online payment processor market in China is dominated by Alipay(51.8%) and Tenpay (or wechat pay 38.3%) as per research report .
China online payment tools share in Q1 2016
There is no room for LeFinance on mobile payment market. And that’s why LeFinance embrace blockchain technology as a final resort to gain some breathing space in China.
For the past year, we saw a series of bad news exposed for the heavy-weight player in the technology and capital field. LeEco is a sinking boat and passengers are running for life. It’s not an ideal home for Stellar and the community.