Tiger sniff note: On the afternoon of November 13, LeTV founder Jia Yueting said on Weibo that "grass comes first, and the second stage of the ecological strategy set sail. Mark." . Tencent Finance ’s “Prism” reports: “LeTV officially said that with this Weibo, Jia Yueting wanted to pass the news of raising funds in Hong Kong to the outside world, and another problem facing LeTV Ecology ’s funding problem may be resolved soon. The following is the text of the author's contribution.
What kind of company is LeTV? Recently, it has stood on the cusp of wind and waves. Most people are blind to touch the elephants. They only look at the tip of the iceberg. This article will analyze this issue from the perspective of finance and economics.
Let's first sort out what happened to LeTV this week:
1. LeTV's supplier debt collection involves a huge scale (though denied afterwards);
2. Jia Yueting's internal letter acknowledged that the expansion at this stage was too fast and the capital chain was tight;
3.LeTV's stock price has fallen for several consecutive times;
4. Last night, LeTV reported that downwind owed money (again rumors);
5. Executives increase their holdings of 300 million shares and maintain stock prices;
This series of information indicates that LeTV is currently experiencing a very fragile capital chain, with significant commercial reputational risks, and is prone to runaway storms and sudden death.
To understand what kind of company LeTV is, it is necessary to understand the following questions:
Is LeTV a Ponzi scheme?
Does LeTV involve money laundering?
What is LeTV's business model?
The prisoner's dilemma currently facing LeTV?
When Jia Yueting faced such a dilemma, what choices and basis did he make?
Does LeTV have a similar model? Are there any successful cases?
Is LeTV a Ponzi scheme?
To answer this question, we first have an understanding of Pond's.
The Ponzi scheme, the most typical of which is the Madoff case, has several typical characteristics:
√ Demolition of the east wall to make up the west wall
√, keep financing
√ Repayment of old debt by new debt
√, no actual investment
The last one is the fundamental characteristic of the Pond's scam. In simple terms: only consumption and maintenance activities, not productive activities.
Therefore, the collapse is inevitable, just a matter of time. Like Madoff, his ability is super strong, and it has been maintained for 20 years.
But LeTV is different. It has actual business, such as video, LeTV sports, mobile phones, TV, etc., can be seen and touched, and the scale is expanding rapidly. LeTV's car construction has also made some progress, at least not like the Ranger. The press conference was held earlier than LeTV, but there was no shadow. Fortunately, LeTV currently has its own actual car, although there is no mass production.
(News broke out: The US state of Nevada issued a warning that LeTV was in arrears for the construction project, which also shows that LeTV is actually investing in construction.)
LeTV and the Ponzi scheme have nothing to do with a dime.
Does LeTV involve money laundering
A friend of mine asked if LeTV was involved in money laundering:
"My teacher used to work in politics and economics. He suspects that making cars, going to the United States, and going to the Russian market is to launder money for senior executives."
As for this friend, his starting point is a kind of view that many people prefer: change US dollar assets and rush away.
To answer the question of whether money laundering is involved, let's first understand what money laundering is all about.
The so-called money laundering is simply: legalize illegal money. By constructing false business, false cash income is generated, which is legally and reasonably recorded, and finally transferred to the banking system to become legal money.
If you have an illegal huge sum of cash, you must not deposit it directly to the bank. You are tens of millions or millions, and the banking system may not pay much attention. But if you have tens or even hundreds of millions of cash in direct deposits, commercial banks will be alert under the central bank's anti-money laundering system. You must have a corresponding actual business explaining your cash transactions, otherwise you will be investigated, and problems often come out as soon as an investigation is made.
With money laundering in the movie industry that everyone is familiar with, you act as a film investor, invest in a blockbuster, and participate in dividends. Then you have a good discussion with the movie theater. You use illegal cash to buy movie tickets and leave the charter room empty. The cash turns into theater income, which is nominally box office income. Since you (the film investor), the producer, and the theater have agreements, you will be able to spend your expenses at a reasonable cost. In the end, this money will become the dividend income of investing in large-scale movies.
In the end, the huge sum of money from illegal sources was legalized through investment dividends, that is, buying their own box office.
This is the whole idea of money laundering.
LeTV, it ’s aggressively investing and expanding its factories a bit blindly. Although some buy land (there is a real estate speculation), it is based on the reasonable demand of the business itself and does not have zero marginal cost (sell an additional movie ticket The objective conditions of no expenditures) are difficult to get involved with money laundering.
Obviously, the idea that LeTV is involved in money laundering cannot stand scrutiny.
It may be a relatively reasonable guess: LeTV helps some people transfer assets.
But at present, in the things that LeTV does, the assets that have not been acquired are actually owned by themselves (that is, left-handed and right-handed). Moreover, to transfer assets, it is enough to find an investment institution. Finding LeTV is simply laborious.
Therefore, LeTV has neither the possibility of money laundering nor the possibility of helping some people "change US dollar assets."
What is LeTV's business model
Until now, you will ask, LeTV is not this TM, then TM is not, what exactly is it?
Well-known media person Wei Wuwei expressed his confusion in an article entitled "Is LeTV a scam?" A few days ago:
"LeTV survived, to be honest, I thought that it could no longer be measured by business logic."
To answer this question, let's first build a small scenario model:
Business Character: Junji
Time: Early 2000
Scope of activities: ABC University
Appearing commercial companies: A fruit shop, B restaurant, C supermarket, D real estate company
Rumored relationship: Junji and ABC City Party Secretary may have a certain relationship
Junji currently runs a fruit shop at ABC University, but faces fierce competition. Because Junji firmly believes in economies of scale, he launched the "Every student who has registered for a fruit shop APP can buy at 40% off the market price". Subsequently, the number of student users of A Fruit Shop expanded rapidly, and it tended to develop in surrounding universities.
Because the price of fruit is close to the cost, it basically means that it does not make money, and the fruit store barely breaks even. However, the scale and users are developing rapidly, and the financial report data is also good-looking. Investors and banks have a high valuation of this fruit store, and they also recognize it.
Junji is very ambitious, and is not satisfied with this, and finds a business opportunity-a specialty restaurant mainly featuring meat clips. Let's do it. Mortgage the equity of the A fruit shop and get a fund to invest in the decoration of the restaurant B. However, due to the lack of operating funds, he gave up part of the equity for financing. After obtaining the funds, the restaurant began to operate.
In order to quickly occupy the market and operate efficiently, the restaurant mainly promotes Internet ordering and announces that all students who use the “A Fruit Shop APP account” to order food online can enjoy a 30% discount compared to the same price in the surrounding area.
So there was another fire. Restaurant B's financial data, user growth rate, and scale are rocketing. Although it is losing money, the capital market recognizes this "APP account system."
This operation strategy is naturally very good for A Fruit Store. Investors believe that “A Fruit Store APP account is too active, with many users, rapid development, and high stickiness”, and the valuation is generally rising.
At the same time, for the new business model of Restaurant B, Fengruo Jewelry has a high valuation. (But not many people want to buy shares)
Later, with the same financial means, a supermarket C was opened around the school.
It is similar to the Internet thinking mode. Those "friends" around the school, "hate him", because it is the "APP account" system, this time is a 50% off-price pricing.
The “APP account” of A Fruit Store is super fierce, and the valuation continues to be crazy. Junji also mortgaged the equity of Restaurant A more and exchanged funds.
Although some people began to criticize him, "these businesses are losing money", but Jun Er's performance was unshakable.
He also closely followed the political and economic news, and from some consultations, he smelled that "real estate around the school is extremely promising." So without saying a word, marched into real estate (early 2000).
Although I have no money, I believe that "as long as the strategic vision is good enough and leading enough, the funds will follow me", so I took a piece of land from the government and asked for 50 million in land transfer fees.
Where does the money come from? A cashier from A Fruit Store has mortgaged more money, 20 million yuan, first handed over to the government.
At this time, there should be investors looking for him, "Second brother, I also invest."
Not like before, everyone thinks that the real estate industry has a long cycle and large capital investment, and the risk is too high.
There was not enough money, and the deadline for the government to pay was approaching, so he took out 10 million yuan of funds from the supermarket purchases to pay for the real estate investment in the early stage.
Still not enough, he took part of the operating capital of supermarket C and restaurant B.
The tragedy turned out, and no one dared to invest in Ding.
At this time, those early suppliers who supplied to C supermarket said, "June, ah, our payment was originally a one-month billing period, and now it's all three months. You haven't paid it yet."
The crisis came like this. A bunch of people urged debts, saying Junji you owe me wages, owe me money, owe me taxes and fees ... At the same time, everyone's valuation of restaurant A has also fallen.
Junji began to publish an open letter in the media saying that the current business development is too fast and we will shrink the front. Ding Real Estate Company "We no longer invest."
Because many people think that Jun Er may be a relative with the ABC Municipal Party Committee Secretary (can't talk about it in detail, you understand), so the bank has not forced the company A's equity mortgage loan to be repaid in advance.
I believe that after reading this small model of the scenario, one-to-one correspondence between the methyl ethyl butyltin in the scenario and LeTV ecological related companies; at the same time, we also sort out the structure diagram of the scenario model:
Note: Jun Er is unable to allow Ding to conduct equity financing
A fruit shop cannot withdraw working capital to Ding [Similar to LeTV (300104), funds cannot be withdrawn, illegal]
I think that when you write here, you will basically understand what is going on with LeTV.
To be precise: LeTV's current business model is based on LeTV (although unstable and not a cash cow) and diversified expansion (each project is basically at a loss stage, but has certain business prospects).
The ecological company's funds came from the early period, from Jia Yueting's private equity mortgage or realization, and later financing, but the overall loss became more and more serious.
There have even been misappropriation of the operating capital of ecological subsidiaries for investment projects, using short-term loans and long-term investment: "short-term (mobile phone) working capital" was diverted to "long-term projects-automobile research and development", the east wall was dismantled and the west wall was funded. The chain crisis broke out.
(Although LeTV had an interview article a few days ago, Jia Yueting denied this. If the operating funds were not taken away, then LeTV's mobile phone capital chain would not be able to be broken. The production and sales business itself is a cycle. Refer to that model to understand)
How big is the risk, everyone can feel it. The whole collapsed, probably with just a flick of a finger.
The prisoner's dilemma facing LeTV
LeTV is currently expanding and it is difficult to stop. Facing a situation similar to the prisoner's dilemma, let's analyze in turn:
√ Continue to expand and invest madly.
LeTV Ecology continues to fly all the way, LeTV.com (300104) 's stock price will not fall, and the foundation of the development is in good credit. If it can always be financed to realize the "fund follow the excellent strategy" originally conceived by Jia Yueting, there will be no development problems. But at the moment, no funds can be raised, and the capital chain is almost burst (though not yet).
√ Continue to expand, not much financing.
There is no money, and I don't make any money at the moment. I can't develop it directly.
√, LeTV does not expand, but conducts financing.
LeTV estimates that it is difficult to get money, and the company is left behind.
√, LeTV does not expand, but does not conduct financing.
LeTV's ecological imagination was greatly reduced, and the growth rate dropped. The valuation model will no longer be high-tech growth stocks, and the stock price will fall. The stocks mortgaged for capital may be liquidated, and Jia Yueting's personal credit will collapse.
The video industry does not make any money, and LeTV's valuation can be imagined. No other ecological project can earn money or survive independently, and still needs financial support. Let's imagine the crisis. (Of course, it is not ruled out that Jia Yueting rejuvenated his hands, turned the tide, and turned the company into a crisis)
So LeEco faces the prisoner's dilemma, no matter what strategy it makes, it will be a difficult decision.
Jia Yueting's Choice
Analysis of Ming-level business logic:
Take a look at the current video companies. Google's YouTube, iQiyi, LeTV, Sohu, and Tencent Video don't seem to have a good way to make money directly.
This means that LeTV Ecology, and the business that finally plays the role of the engine-is unlikely to be the video business.
Ali Engine: Taobao, Tmall;
Ant engine: Alipay;
Tencent Engine: QQ and WeChat;
Baidu engine: search;
Xiaomi Engine: Mobile Phone Business
For Google, YouTube is similar to Tencent's QQ account system, becoming an account pass. In my personal analysis, Jia Yueting should probably think of LeTV as a pass. The video has been deeply cultivated in the world for so many years and it really does not make money. (He cannot see this trend)
From the other six businesses, a "core engine" has been developed. (Jia Yueting succeeds with just one piece)
Let's think about the companies listed above, their engine business, without exception, are cash cows (cash cows) or businesses that directly lead to cash cows.
Now Jia Yueting's choice: continue to expand, wait until the six business (except that may expand other businesses) in addition to video, an engine business. This is the ultimate mystery of what Le sees as always expanding.
From a business logic perspective, that's what happened;
Dark side business logic:
The other negative side must be explained from the perspective of adverse selection by shareholders. Let's start with a concept of popular science: adverse selection by shareholders.
Shareholders invest in projects with high risks without the consent of creditors. The reason is that if the plan is fortunately successful, the excess profit will be exclusively owned by shareholders; if it fails, the creditor will bear the loss.
To put it bluntly, back to LeTV, the actual controller Jia Yueting used his identity to absorb a large wave of CCCC shareholders and creditors' funds and invest in excessive returns-super risk projects.
If it succeeds and becomes a core engine business, Jia Yueting will be able to compete for the status of rivers and lakes like Ma Yun and Ma Huateng;
If it fails, the video website would be worthless. Besides, he has already cashed out so much, and directly made the listed company owe him 10 billion non-interest-bearing debts, which has already made a heavy profit. (If the company goes bankrupt, the settlement right of the minority shareholders is behind the creditors)
Therefore, he made money horizontally and vertically, but his reputation was basically destroyed after the bankruptcy, and he could not get the status of the rivers and lakes. This is certainly not what Jia Yueting wanted, and what he did was not necessarily satisfactory.
From the business logic of the bright side and the adverse selection of the shareholders on the dark side, Jia Yueting will always expand. Even if it stops at this stage, it will continue to expand until the core engine business emerges.
But objectively speaking, Jia Yueting definitely hopes to succeed, and he is also ambitious. Those who pursue success in business (few people will consider adverse selection) have a strong desire to achieve success, so he has not been so easy.
The dream is suffocating, but it is not so easy to achieve.
Success stories similar to LeTV
There are certainly such cases. Elon Musk is typical.
This guy previously founded PayPal, and later sold it to eBay. After having money (similar to Jia Yueting's listing of LeTV and having money), he later invested in and founded Spacex Space Exploration Company and Tesla. In the early stage of the business, he directly invested and invested in shares. SolarCity Battery Company becomes the largest shareholder. (SolidCity co-founder and CEO Lyndon Rive is Musk's cousin)
Before Tesla's success, he had been tortured haha, suffered a lot of people to laugh at, but then Tesla got up.
Taking advantage of Tesla's current achievements, Elon Musk made it a core engine company and saved a dead game. But Tesla, Spacex, and SolarCity were placed a few years ago. Do you believe it? Not many people believe it.
Jia Yueting built electric cars, and I felt like I was learning him, but it made people feel that LeEco learns its form and forgets it. (I will discuss the gap between the two later)
to sum up:
Under the leadership of Jia Yueting, the family ’s number one gambler, LeTV tied up a large number of gambler-like investors and launched innovative investment activities with super high risk and super high yield. It is in line with what Jia Yueting said:
Either death or great.
But at the moment, LeTV has encountered the most serious credit crisis in its entrepreneurial history (credit run-off crisis caused by tight funding chains and close to collapse).
It is indeed very difficult to solve this problem. How to play the entire game and keep the chain of funds is the most critical. No matter what measures are taken, with Jia Yueting as the core, the trust built up through hard work can't cause problems, otherwise, it will really collapse.
Of course, I also saw the adjustment of LeTV. (See Jia Yueting's internal open letter last weekend)
As for what LeTV will do in the end, it is really difficult to predict; if we pass this level, we will continue to expand, but pay attention to the pace and wait for a while, we may have a chance to succeed and find the core engine. But for now LeTV is really difficult.
Still hope that beautiful dream that is suffocating, come true soon, bless Jia Yueting!
To say a few digressions, I personally admire Jia Yueting's capital operation level for the following reasons:
1. Relying on one PPT to get a large amount of funds for development, the key is not to let it be pierced;
2. Make every effort to maintain everyone's trust in him, and present an image of the company's prosperity;
3. How many people got on his thief ship, this ability is not generally strong;
He also appreciates his hardworking spirit in pursuit of his own ideas.
To be honest, learn some listed companies of A-shares honestly, there will not be such a great pressure at all, and I have been hard-working all day long, looking for a lot of hardships.
Again, either mediocrity or death.
Original link: http://ps3-ita.com/internet/58.html
Author: Autumn source Shunji Source: Tiger sniffing network