Reborn: Billionaire in College

If Jia Yueting hadn't been so aggressive, Chen Pingjiang wouldn't have wanted to take action at this time, because Jia Yueting is now in the limelight and LeEco has no obvious problems with its capital chain. Taking action now means paying more costs.

In fact, LeTV did not run into problems until 2016.

In November of that year, it was reported online that LeTV's cash flow was tight. In the same month, Jia Yueting confirmed that the company had begun to face a debt crisis. In 11, LeTV began to lay off employees on a large scale, and because of overdue payments, several banks filed lawsuits in court to inspect LeTV's assets.

Chen Pingjiang still remembers clearly that a large group of suppliers coming to collect debts stormed LeTV's headquarters building and slept on the floor downstairs.

Countless suppliers and shareholders lost all their money, and some even never recovered.

Later, Jia Yueting saw that the situation was hopeless and he was powerless to turn the situation around. He just couldn't swallow this humiliation. He had to take someone with him to take the blame even if he had to die. Jia Yueting thought of his old friend Sun Hongbin of Sunac China.

In January 2017, Sun Hongbin came to LeTV with sincerity and 1 billion in cash, and reached a restructuring agreement with Jia Yueting in just 150 days.

Poor Sun Hongbin, he was so wise all his life, but he couldn't escape the mockery of fate.

On July 2017, 7, Jia Yueting boarded a flight to the United States, leaving the hometown that raised him for many years.

Two days later, he posted a Weibo update, saying he would take responsibility to the end.

Later, another person who joined the game was Evergrande’s boss Xu, who was also cheated by Jia Yueting.

It would have been fine if things had just ended here, as everything can be blamed on poor management.

The despicable thing is that LeTV has been committing financial fraud for ten years and issuing shares fraudulently!
When internal problems arose, instead of thinking about solving the problems, they sold off a large amount of LeTV shares in 2015.

The reason was not to improve life or to pay for children's tuition, but to lend money to LeTV for turnover after selling stocks, and a letter of guarantee (promise from the controlling shareholder) was also written.

It turns out that writing a letter of guarantee is no longer effective when it comes to money.

In 2015, the company sold off its stock holdings twice, cashing out a total of 55 billion yuan.

According to the investigation results of the China Securities Regulatory Commission, in the two years following the reduction in holdings, LeTV and Jia Yueting had a total loan amount of 113 billion yuan, a total repayment of 113 billion yuan, and 40 payment approval forms.

After hesitating, Chen Pingjiang decided to give it a try.

Chen Pingjiang is certainly not the kind of person who would cherish his life when planning big things and forget about righteousness when seeing small gains.

Now, while the LeEco crisis is not that big yet, let’s give it a blow first and knock it out.

In this way, at least suppliers will be owed less money, and shareholders will not be stuck on the top of the mountain.

In this way, there would probably be fewer tragedies.

The next day, Bu Housheng was transferred back to China from the other side of the ocean by Chen Pingjiang's order.

After hearing what Chen Pingjiang said, he was shocked beyond words. After hesitating for a moment, he asked, "Mr. Chen, is there any risk in doing this?"

Chen Pingjiang smiled mysteriously, and then gently uttered a few words.

This time, Bu Housheng was not only shocked, but also numb.

He knew that Chen Pingjiang would not joke about such a big thing. Since he said it, it was most likely true.

The next second, Bu Housheng quickly took out his mobile phone and searched the Internet.

The last news about that person was four months ago, which is obviously an extremely unusual signal.

“So are we going to mobilize funds this time?”

Chen Pingjiang shook his head and rejected it: "We will not enter the market this time. You know the A-share market, and shorting here has a bad impact. As for whether others want to take a bite of this piece of meat, it depends on their ability."

Bu Housheng nodded repeatedly, feeling that it was a good thing this way so that he wouldn't have to bear such great pressure.

The short selling system in the United States is more mature. Although naked short selling is prohibited in the A-share market, margin trading and securities lending are not completely prohibited. If you really want to short LeTV's stock, it is not difficult, but it will be very troublesome.

There is currently no restriction on financing, which is limited by account balance and own assets. The difficulty lies in short selling.

Because it is generally difficult to find securities sources for short selling, this is also one of the reasons why A-shares are not fully shorted. One reason is that it requires authority, and the other is that there may not be securities sources.

Chen Pingjiang's industries in China are mainly physical entities and the Internet. He looks down on finance and prefers to suck the blood of foreigners.

First, they want to protect their reputation and don’t want to be criticized; second, they don’t want to have any psychological burden.

But if those securities firms really want to enter the market smelling blood, Chen Pingjiang will not be able to stop them.

"Have you prepared the LeEco short-selling report I asked you to prepare last year?"

Bu Housheng smiled and nodded, "It has been prepared a long time ago, and it is being updated continuously. The total length of the report is now over 100 pages, with detailed data. And to be honest, LeTV's financial fraud is nothing new in the industry. Anyone with a little common sense can see it, but they just didn't want to provoke him in the past."

In this regard, Chen Pingjiang could only shake his head helplessly. Big A makes people love and hate him.

Shareholders all hope that it can succeed, but the major shareholders are always thinking about committing financial fraud, raising the stock price, and then cashing out and selling the company to you. Who can stand this?
Every time the stock price goes up, shareholders of major listed companies immediately start lining up to cash out, which is simply a spectacle.

In the huge office, Chen Pingjiang held the short-selling report prepared by Bu Housheng and read it carefully, chuckling from time to time, which sounded both sarcastic and mocking.

"LeEco's board secretary Zhang Te was originally a member of Ping An Securities' sponsor project team. After successfully sponsoring the company's IPO, he joined LeEco and worked his way up from securities affairs representative to board secretary. This person definitely knows more about LeEco's operations and financial situation than the average person. It's impossible to say there's nothing fishy going on."

Bu Housheng immediately echoed, "Through our long-term observation, LeEco has been committing frauds repeatedly, and its fraudulent methods are not sophisticated compared to other fraudulent peers. However, the auditing agency as an accounting firm still did not discover it, or perhaps they did not want to discover it, or did not disclose it after discovering it, etc. In short, the result is a deviation from investors' expectations. The company responsible for the IPO audit from 07 to 09 was Reanda, and the audit opinion was fine; the auditor from 10 to 14 was Huapu Tianjian, and there were no problems every year as well."

"They keep saying this for one or two years. It's like this every year. I can only lament that domestic sponsors and auditing agencies are all birds of a feather."

"Among them, the amortization period of film and television copyrights and deferred income tax assets may not indicate any problems, but at least they show that the management has a strong motivation to manipulate earnings, which cannot but cause accountants to be extremely cautious. In the actual audit of financial statements, accounts receivable are on the books for a long time, and losses are turned into profits. Revenues such as advertising swaps that have no cash flow at all should themselves become special risk areas and accountants should pay attention to them."

"This was particularly evident during the IPO phase and the first year of listing. At that time, LeEco's business had not yet grown to its current size, and the fraudulent revenue accounted for more than half of the real revenue, or even exceeded the real revenue. If you really want to check, you will find it right. It was not until the last one or two fiscal years that the fraudulent revenue accounted for a very small proportion of the overall revenue."

"As long as we can get a real bank statement and conduct some analysis and comparison, it is not that difficult to find out the fraud with LeEco's fraud method. If the accountants know about the fraud but don't say anything, then we can look at their audit working papers. The most important material for the CSRC to investigate accounting firms is the audit working papers."

Chen Pingjiang listened to Bu Housheng's introduction while reading the short-selling report carefully. It was obvious that Bu Housheng was very attentive to this report.

If it were really released, LeTV would definitely be beaten to pieces.

In fact, when Jia Yueting was at the peak of his popularity in the past two years, many people always liked to compare him with Chen Pingjiang.

It is believed that Jia Yueting is a business genius comparable to Chen Pingjiang.

Of course, there were also people who attacked him.

Many online comment articles are about LeEco's business model.
In the discussion, some people supported him, saying that the products he made, like those of Orange Technology and Renren, benefited consumers. Of course, more people scolded him, saying that he was a liar, a Ponzi schemer, and a selfish guy.

If we abandon this meaningless moral judgment and simply start the discussion from the perspective of "financial fraud", then all information not related to financial fraud will be noise, and our thinking will begin to become clear.

Since Jia Yueting founded LeTV's video business, his focus has gradually shifted from the communications business. He has established dozens of companies of varying sizes and created a complex equity structure.

The industry also involves video, film and television, cloud, sports, new media, boxes, TV, finance, mobile phones, automobiles, etc.

The things he makes are even more diverse than those made by Chen Pingjiang.

It launched the so-called "LeTV model": platform + content + terminal + application, and created some strange words, such as ecological reaction, open closed loop, suffocating for dreams, running blindly, etc.

The vagueness of his story makes it easier for people to believe in his dream. From this point of view, Jia Yueting is a bit like a Ponzi scheme.

Because all Ponzi schemes are about coming up with something high-sounding and telling people that it’s okay if you don’t understand, just follow them and reap the benefits.

In modern business, there are not so many complicated things. If an ordinary person with normal logical thinking cannot understand it, then there is something wrong with the person who is speaking. Either his explanation level is not good enough, or he is deliberately making things mysterious.

Simply put, LeTV's so-called ecosystem is actually based on content, connecting all possible surrounding scenarios related to the content.

Now that we have video content, we need to make TVs, mobile phones, and cars. After making mobile phones, we need to make apps. We can’t let other people’s software make money on our phones. Finally, we need to make a platform to link all of the above things together.

In this way, everything LeTV has done since its establishment becomes much clearer.

However... what a pity!
The difference between LeTV and Renren, and the gap between Jia Yueting and Chen Pingjiang lies in whether the business was successful or not.

LeTV expanded blindly, failed in everything it did, and then used financial fraud to create an image of "I'm awesome", which was a blatant fraud.

However, Orange Technology and Renren, both owned by Chen Pingjiang, are genuine and well-known companies.

Moreover, Jia Yueting put all his businesses into one basket in order to drive up the stock price, but Chen Pingjiang was eager to separate them all.

In this way, the leeks fell into the trap.

When retail investors speculate in stocks, they rarely ask about the company's financial situation. Most of them just enter the market because of the popularity. After entering the market, they wait to be trapped.

When Chen Pingjiang saw the introduction about LeTV mobile phone in the short-selling report, he couldn't help laughing.

This guy is really good at fooling people.

Seeing that Orange and Xiaomi were both in the mobile phone market, LeTV also rushed into the market eagerly.

The super phone released in the first half of the year has an incredibly low price, and all the costs of the phone supply chain are made public, which would be fine.

What’s disgusting is that Jia Yueting claims to break the monopoly and arrogance of Apple and Orange.

Blatantly trying to deceive Chen Pingjiang!
But at that time Chen Pingjiang was busy with the birth of his child and had no time to take care of him, and he didn't want to give Jia Yueting the opportunity to take advantage of the traffic.

Everyone knows that this guy is eager for Chen Pingjiang to respond so that he can start a war of words and make LeTV phones popular.

It was not until midnight that Chen Pingjiang finished reading the report and threw it aside. He said to Bu Housheng, "Let Muddy Waters release the report as usual."

Bu Housheng frowned and said, "Mr. Chen, Muddy Waters is an overseas organization after all, and LeEco is listed on the Growth Enterprise Market. To be honest, there is no reason for Muddy Waters to spend energy on making a report. Moreover, the relationship between Muddy Waters and us is not hidden, and many people in the financial field have known about it for a long time."

Chen Pingjiang shrugged indifferently: "If you know, then know. It doesn't matter. Besides, what does it matter if you know? There is no evidence anyway. Besides, even if Jia Yueting knows that I am fanning the flames, what can he do?"

"OK then."

Bu Housheng was also somewhat shocked by the boss's determination.

I don’t know how Jia Yueting offended the big boss and caused such a hunt.

Of course, in the end, it was LeTV’s own financial fraud. If it was strong enough, it would not be afraid of a short-selling report.

…………

On September 9, just when Jia Yueting returned to Beijing from a business trip to Dongjiang, he had just arrived at the door of his house.

Jia Yueting saw a post on Weibo that was full of innuendo.

"A video website ranked 17th has the best financial indicators in the industry. It's a magic trick."

The poster was Bao Fan, CEO of Huaxing Capital, whom Jia Yueting had been following for a long time. The two had met once, but they were not familiar with each other at all.

The reason why Bao Fan made such a statement was that he was commenting on a retweet of someone else, which was about a certain company's IPO financial fraud.

For a moment, Jia Yueting's face felt hot.

But the two sides had no relationship in the past and no grudge today, so why would Bao Fan DISS himself?

Only the people know their own business. LeTV did use some not-so-glorious means when it went public.

"'Video website', just name me. Hehe, something happened to my leader, and now anyone dares to step on me." Jia Yueting was angry. (End of this chapter)