LeTV's share price has fallen behind the market is not willing to share the risk with it

On November 2nd, LeTV’s seventh sub-economy, Letv Finance, debuted in Beijing. In the face of new stories, the market voted with its feet, and the main force was violently sold. LeTV’s share price dropped by over 7%. On November 3rd, LeTV’s stock price did not change. Its latest stock price was as low as RMB 40.63/share, and fell sharply below the previous reserve price of RMB 45.

The stock price plunged and the capital fled, leaving the market worried that it would trigger a chain reaction. The first to bear the brunt of this is LeTV’s nearly 5 billion yuan financing package. When the two financing funds are no longer an endorsement of their stock prices, and the stock price continues to decline, Jia Yueting’s risk of equity pledges will light up. The Lexus funds’ land mines will also be detonated.

In fact, behind the big drop is Leshi’s long-lost industrial story. The rumors of arrears of billions of dollars have caused the market’s pessimism towards LeTV.

“LeTV’s lack of money is undoubtedly a question. Can we not get past? Now people do not know, but the fact is that the market’s funds are no longer willing to share risks with it.” For example, a private equity executive in Shanghai opposed “The First Financial According to the Daily News, the stock price plunged behind the stubborn illness that LeTV has long been unable to avoid - a shortage of funds.

How much is the chain risk?

On November 3, after a 7.49% plunge on the previous day, LeTV’s weak share price did not return to life. After a day of struggle, it fell again and fell by nearly 1 percentage point. In the past two months, LeTV, whose trading volume is not high, has been fluctuating around the 45-yuan mark.

Before August, LeTV completed a planned increase of nearly 4.8 billion yuan at a price of 45.01 yuan per share. The China Postal Fund, Caitong Fund, Harvest Fund, and Niu Sanzhang Jianping, where Ren Zesong, who is the newest “public fundraiser”, have rushed to support him. However, since the market did not buy it, since the resumption of trading, the star company's stock price has been all the way weak, from the highest point of 60.98 yuan to the latest closing price of 40.63 yuan, LeTV has dropped more than 30%.

It must be mentioned that as LeTV’s strongest financing platform, this is LeTV’s first increase since the online market. This means that for LeTV, which is under tight funding, the 4.8 billion increase will be a "blood" and the degree of importance is evident.

"First Financial Daily" reporter checked LeTV's recent announcement and found that compared to the previous major asset restructuring progress announcement, this time the fixed growth reorganization progress announcement added "does not rule out the possibility of subsequent adjustments to the reorganization plan." A hint. Obviously, the “preservation” of the issuance price is particularly critical for LeTV.

The stock price plummeted, let LeTV first fell to the "bottom line" of 45 yuan, letting the agencies participating in the increase increase. Among them, the fiscal fund lost 171 million yuan, Zhang Jianping floated a loss of 109 million yuan, Harvest Fund and China Post Fund each floating loss of 93.41 million yuan.

In fact, the fall of LeTV has been traced. "First Financial Daily" reporter found that from October 25 until now, LeTV continued to be sold by the main funds, 8 trading days, the main funds have accumulated a total of 1.163 billion yuan to flee. Eastern Fortune Network data show that on the day of the sharp fall on November 2nd, the main fund was significantly larger and fled to LeTV. The net outflow was 592 million yuan. On November 3, the net outflow was again 249 million yuan.

"Lectra's recent stock price chart is not very good. After entering the down channel, the funds are no longer willing to stay." The above private equity executives analyzed the "First Financial Daily" that LeTV's stock price "can not afford to fall" and continue to fall Or bring it chain risk.

The first is the two financial capital renegade, LeTV's nearly 5 billion financing disk is not optimistic. Two financial data show that as of July 2 LeTV's big day, LeTV's two financial losses fell to 4.973 billion, a drop of 2% from the previous day, the day's purchase amounted to 410 million, repayments of 516 million, net The outflow reached 106 million yuan. Further statistics show that since October, LeTV has accumulated a net outflow of over 1.2 billion yuan.

The aforementioned private equity executives believe that for leveraged funds, LeTV's market value is highly risky and it is “very dangerous”. The market currently has new opportunities for profitability. Financing has taken advantage of the situation, which in turn drives share prices down. According to another public fund manager interviewed by the "First Financial Daily", this may have allowed LeTV to enter a vicious circle, which eventually detonated the risk of equity pledge of Jia Yueting, the head of LeTV.

LeTV’s three quarterly report data shows that 183 million shares of LeTV, which is held by Jia Yueting, are currently in the state of pledged total of 57,100 shares. In other words, nearly 84% of the shares in Jia Yueting’s hands were used to pledge financing. Coincidentally, as the third and fourth largest shareholders of LeTV, Liu Hong and Jia Yuemin also pledged some of their shares. Among them, Jia Yuemin holds music as 43.9472 million shares, holding 2.22%, the pledge rate is as high as 95.16.

Over 80% of the shares are used to pledge financing, which is rare in listed companies. When the stock price fell sharply, as a pledger, Jia Yueting was required to add additional pledges, and even faced being closed. This is undoubtedly a big "dead circle" for LeTV, which is already short of money.

However, the above-mentioned public fund managers believe that although the downward trend is dangerous for LeTV and Jia Yueting, it has not fallen to the point where equity pledges are to be liquidated, and it is really bad. The aforementioned private equity executives believe that LeTV can also Suspension of the deal.

LeTV's "Gate of Life"

Lack of money is LeTV.com's "Gate of Life". The rumors of the "collocation" of share price crashes are related to the cash flow of LeTV.

Just two days after Le Shihua invited the media to participate in its entry into the US market, some media reported that LeTV owed more than 10 billion yuan to its suppliers and has been refused delivery. In order to ensure the smooth start of the subsequent electric car factory, LeTV even began to use delayed transfer of employee wages, stop the mobile phone users to pre-purchase the mobile phone to raise cash flow, multiple pre-order Le Lele Pro3 users reflect the relevant issues.

Shortly after the news was issued, LeTV's stock price suffered a setback, which made the market can not help but treat the two as a causal relationship. Like many other similar cases in the past, LeTV has responded by defining the above message as "untrue rumors." According to LeTV's explanation, the company's business lines and suppliers have maintained a good relationship of cooperation, business operations are good, there is no case of large amounts of payment in arrears; due to the huge amount of money owed to suppliers, resulting in falling stock prices, There is no factual basis.

Although the rumors are still difficult to distinguish between true and false, but the recently disclosed three-quarter performance data of LeTV has still revealed the "financial tension" signal. LeTV revealed in the third quarterly report that in the first three quarters of 2016, affected by the interest-bearing loans from major shareholders to listed companies and Lexus M&A funds, some of the funds raised, bank loans and commercial credits, the company’s asset-liability ratio was relatively high. Reached 65.72%.

"LeTV is not in doubt about the lack of money." Such voices are often heard in the industry. There have also been brokerage figures who said that in the development of LeTV, cash flow has always been its biggest constraint and bottleneck.

In addition, while the net cash flow from operating and operating activities has fallen by more than 30% year-on-year, LeTV's “three fees” has increased significantly year-on-year, with increases in sales expenses, management fees, and financial expenses of 160.07% and 88.04%, respectively. 197.92%.

Overall, LeTV.com's performance in the first three quarters of this year showed an upward trend compared to the same period of last year. Operating income was 16.795 billion yuan, up 100.54% year-on-year, and net profit attributable to shareholders of listed companies was 493 million yuan, up 30.75% year-on-year. However, the industry has always been not satisfied with LeTV's financial status, and various questions have occasionally stirred up in the market.

"Financial conditions are certainly flawed. If it is so persistent, it means that the business model cannot obtain cash flow or profits," said a Beijing-based private equity person.

In the market's doubts on LeTV's financial problems, "operational revenue is suspected to be confirmed in advance" is one of them. In the company’s disclosure of the three quarterly reports, a “new accounting policy” announcement was also issued. The membership fee was no longer tied up with the terminal and became an independent income. The basis for the confirmation of the member’s income was kept in addition to the current period of confirmation. In addition, the new policy of deferred confirmation was added.

In this regard, Lu Guihua, a professor at the School of Accounting at the Central University of Finance and Economics, believes that the changed accounting policy is a small step ahead of the previous one, and the way to confirm revenue is more correct. However, after the multi-year membership fee is deferred, it is against the listed companies. There will be a certain negative impact on performance, and the overall effect should not be significant.

However, in the market, LeTV's financial problems are still full of fog.

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