This video Author: IC laboratory

I thought 2020 was magical enough, but the beginning of 2021 still shocked me.

Especially when I know that Jia Yueting’s Faraday Future will be listed on the Nasdaq, valued at US$3.4 billion, and I will also establish a joint venture with Geely Automobile and a certain domestic city to establish a Chinese headquarters and production line.

This may mean that Boss Jia, who has been away from the motherland for almost four years, will finally take advantage of this shareholder wind to return to China.

There should be a BGM of “Clouds in Hometown” here.

On the other hand, before the Spring Festival, when all the major platforms were giving out red envelopes and giving out more money than anyone else, only LeTV added a line “owing 12.2 billion” to the logo of its own App.

This operation is very embarrassing, as if Boss Jia took off his shorts again to remind everyone, “This man is a liar!”

A conscience enterprise is better than LeEco.

In the past, the share price of three domestically-produced electric vehicles soared, and then the market value of Evergrande, which did not build a car, soared to 350 billion Hong Kong dollars.

Now YT Jia who is seeing credit bankruptcy also wantsRiding on this back wave and making a comeback, I can only say that when the capital market rides on electric vehicles, I wait for mortals to catch up with its logic anyway.

So in this episode, I want to talk about Jia Yueting’s capital logic and why he is still jumping.


It is still the old practice to put the conclusion first.

LeEco is indeed a Ponzi scheme, but it is more like a variant of it. It is not that there is no actual business at all. On the contrary, Jia Yueting’s vision is still very advanced in some aspects, and many business logics can indeed be established under certain circumstances.

Because of this, until 2021, there will still be tap water to wash the ground for Jia Yueting, and there will be people who are willing to continue to pay for Jia Yueting.

But in fact, whether it was the clown who was promoted to the altar by stock investors in 2014, or the clown who fell into adulthood in 2016, or is now back to the game. Jia Yueting has always been there, he has not changed, he has been playing his ecological concept and capital games.

What has changed is nothing more than things that have not been done, whether there is wind in the air outlet.

The story starts with LeTV’s landing in A shares.

Everyone knows that there are profit requirements for A-share listings. If there is no continuous profit, you are not eligible for listing. If you cannot maintain profitability after listingLi, is to be ST.

The long video website has always been considered a business with low profitability. The three Aiyuten companies are still trapped in high copyright, server and bandwidth costs, making it difficult to make a profit. Including Station B, whose market value has soared in the past year, is still far from making money.

Therefore, the profitability of listed companies is a dead line of LeEco. We will mention this later.

LeTV was originally a video website, where did the initial profit come from?

Advertising is definitely needless to say, this is the basic commercialization of any video website and the most important.

The other is 2B’s copyright business. In the early years, LeEco bought a lot of copyrights at prices close to the price of cabbage.

How cheap are these copyrights?

According to LeTV’s prospectus documents, the average price for purchasing movies and TV series in 2007 was 17,400 yuan/unit, and in 2008 it was 26,800 yuan/unit. The purchase volume in 2009 was 7 times the sum of the previous two years, and the average price was only 14.47 million yuan/unit.

Compared with the current copyright purchase cost of hundreds of millions of dollars, this is about no money.

From 2007 to 2009, the total cost of copyright procurement for the past three years was only 58.5 million yuan, and it would be hard to buy a top blockbuster now. But what LeEco has acquired is the copyright of 2,324 movies and the copyright of 43,100 TV series.

The copyright is bought at such a cheap price. At that time, some venture capital institutions commented on LeEco, and they thought they were stupid. How can any video website spend money to buy the original? After all, peers such as Youku, Tudou, PPTV, and Ku6 were all pirated TV series.

A company will be marked with certain characteristics of the founder.

The founder is a programmer, and he will be a bit geek; the founder is a teacher, and the company always wants to preach; the founder is a salesperson, the company will be strong in fighting and promoting.

Jia Yueting is an accountant, so accounting is the core competitiveness of LeEco.

For copyright costs, LeEco uses a set of financial techniques called “straight-line amortization”.

Under normal circumstances, assuming a brand-new film and television drama, the purchase cost is 300 million. This money will not be booked at once, but will be amortized and credited to the cost of each period during the copyright period. .

However, it is worth mentioning that the revenue that film and television dramas can bring to video websites often accounts for 90% of the first two years, and only 10% after the third year. The bulk of the profits are in the first two years.

So, the method used in amortization depends on the skill of the accountant.

For example, Youku and Sohu Video adopt a very honest “accelerated amortization method”, which records the bulk of the cost in the first year, and then decreases gradually.

At the end of 2014, Jia Yueting announced on Weibo to build a car. At the beginning of the following year, LeTV Automobile was established. There was no car at the press conference, and only the message “We are really going to build a car.”

In early 2015, LeTV announced its entry into the mobile phone industry. Similarly, no mobile phones appeared at the press conference, only the message “We are going to be mobile phones.”

In the same year, LeTV Finance was established.

So far, LeTV’s three major systems and seven ecological systems have formally taken shape. You can look at this picture:


So how does this ecology give LeTV blood? Some clues can be seen from LeTV TV, which is LeTV Zhixin. Internet TV can be said to be LeEco’s best-known business and the worst business of blood transfusion.

In 2013, LeTV’s first “Super TV” was launched. By 2014, sales had reached 1.5 million units, which was five times the sales of Xiaomi TVs in the same period.

In 2015, sales doubled to 3 million units. This sales volume is definitely not a small player in the domestic TV industry.

However, in the past three years, LeEco’s losses were 47 million, 386 million and 731 million.

In the logic of LeTV, the smart TV business does not rely on hardware to make money. On the contrary, it is the logic of Internet TV to make hardware prices low and then make money from services.

Then, who will bear the loss of hardware?

Remember what I said earlier, A-share listed companies cannot lose money casually. Then the sky will drop the big responsibility for the people in Sri Lanka, and the people must be hungry first, and the burden of loss will be borne by the subsidiary LeEco Zhixin!

Be aware that LeEco Zhixin is not a wholly-owned subsidiary. LeEco only holds more than 50% of its shares, but all the TVs produced are sold to LeEco.

Equivalent to LeEco’s own 100% loss, but more than 40%, allowing small shareholders to pay.

This sickle was cut on investment partners.

That’s not counting.

Originally, the price of smart TVs is not high, and each is selling at a meager profit or even at a loss, but LeEco still needs to dig out a piece of hardware sales as a “service fee.”

Everyone knows that LeTV buys TV to send video members, and a TV comes with a two-year membership period. Assuming the price of a TV is more than 2,000, the value of a 2-year membership is nearly 1,000. So in LeTV’s account book, the income of TV hardware is more than 1,000, and the remaining more than 900 belong to membership fees, that is, service fees.

In LeTV’s business story, TV does not make money or loses money. But each TV is bound to one user, and the user’s future renewal will bring stable income.

To tell the truth, I have seen some apps that cost more than RMB 100 per user. But LeTV spent a thousand dollars to acquire a user,I still can’t think of such arrogance.

Furthermore, when the two-year membership expires, it is still unknown whether your LeTV Store will exist. Such a generous gift to members is not in Jia Yueting’s style.

But in the eyes of accountants, there can be another algorithm for accounts.

Algorithm 1:

In terms of finance, the two-year membership of LeTV TV can only be regarded as income after the user has activated and used it. The service fee income of the year can be included in the financial report every year after the membership period expires. Otherwise, it can only exist as “advance payment”.

But with a swipe of a pen, LeTV directly counted all service fees tied to TV sales that year as income and included it in its financial report. For a moment, revenue and profit have become extremely attractive. As soon as such a financial report was issued, the stock price immediately rose.

But actually? Regarding the long stream of water as a one-shot deal, as time goes by, the membership fee gets less and less, and the life becomes more and more sad.

Algorithm 2:

LeTV originally has an online video business and needs to purchase copyright. The service fee of TV members is purely an incremental market, and the marginal cost is almost zero. Why not give it away? What’s more, I received the money, but the money is reflected in the TV price.

This is another kind of sophistry. The service fee of TV membership itself needs to be supported by copyright. Without billions of dollars in copyright costs, members will be worthless.

So even if the service fee is reflected in the TV price, it is used to cover the copyright expenditure, rather than purely as an incremental market to confuse the audience.

Algorithm three:

TV has been born for nearly a hundred years, and selling TV has long been a sexy story that investors are not interested in.

But LeTV uses “Internet TV”, “Service + Hardware Model”, “Platform + Content + Terminal + Application Ecology” as a package, and the capital market will feel that this is a very imaginative business, and will naturally give LeTV to The new valuation is elevated. At the same time, the shares of the listed parent company also rose.

Accounting is not terrible. What’s terrible is that accountants can talk and do PPT. This is Jia Yueting.

Before we mentioned the various accounting methods of LeEco, we summarized the routine in one sentence: increase the recent income and amortize the cost into the future.

In the final analysis, there is only one purpose: to make a good look at the financial report of the listed company LeTV, and to push up the company’s stock price.

Jia Yueting knows very well that rising stock prices are the lifeblood of LeEco and the driving force behind LeEco’s financial cycle. As long as the motivation continues, the story of ecological antinomy can continue to be told, and LeEco Finance can maintain its motivation.

The pattern of this loop is basically like this:

First step: Realize cash through pledge of shares, additional shares, and stock cash out.

Step 2: Put money into listed companies and ecological subsidiaries to maintain operations.

Step 3: During the operation, use financial means to amortize the cost into the future, or let the subsidiary bear the loss, and the listed company can take the profit and raise the stock price.

Go back to the first step: the stock price rises, continue to pledge shares and issue additional shares in exchange for more cash.

In addition, subsidiaries can also raise funds independently or make profits to transfuse blood for this financial cycle.

It can be seen that only the stock price continues to rise, the company’s profitability greatly improves, and the subsidiaries continue to receive financing and blood transfusions, in order to maintain the inner loop game of making money.

It just so happens that the right time and place are all on Jia Yueting’s side.

When LeTV started to develop the ecological concept in 2014, A shares happened to experience a big bull market. The overall mood was very positive and optimistic, and they were unprepared for the concept and storytelling company. Coupled with the concept of “Mass Entrepreneurship and Innovation” in 2014, Internet companies have become increasingly popular.

A-shares have very high requirements for listed companies, especially profit requirements, which have blocked the listing of countless unprofitable and unprofitable Internet companies. As a result, it has become a common practice for Internet companies to list on US stocks and Hong Kong stocks.

As a rare Internet company in the A-share market, LeEco naturally attracts special attention. This is a geographical advantage.

So LeEco’s stock price rose again and again, reaching nearly 170 billion in 2015.

Speaking of this, you should understand why LeTV loves to develop a conference, even if it is a conference that does not have any product. Why does Jia Yueting like to create such a grand concept of “ecological reaction” and “seven major ecology”?

At the level of listed companies, after all, the science and technology board sees the market dream rate. As long as the dream is big enough, the market will feel that you have room for imagination and the stock price will continue to soar.

At the subsidiary level, you can think of them as startups.

At that time, there was no shortage of valuation bubbles in China’s venture capital circle. The worst ethos is that one can draw pie, and one can talk and talk. As long as there is a good story, the valuation can keep going up, investors can accept your long-term losses, can accept your blood transfusion for the parent company, and can accept rounds of burning money.

Just like Jia Yueting claimed to persuade Terry Gou to make TV together in 5 minutes, Zhang Zhao, the former chairman and CEO of LeTV Pictures, who passed away last week, was also conquered by Jia Yueting’s enthusiasm. He hit it off and built “China Disney” together.

This plot is not more popular than bloggers?


Finally, back to the beginning topic, why is Jia Yueting still jumping, and why is his FF still available? Can someone pay the bill? If you put today’s new energy vehicle business into the logic of LeTV, you will find that everything is alive.

We say that LeEco is a variant of the Ponzi scheme. In fact, the original Ponzi scheme has no self-hematopoietic function. It simply allows the later investors to pay for the first-comer. In the end, the fool is not enough, and it is thundered. .

But LeEco is different, LeEco is not completelyThere are real guys.

At least video websites and TV hardware in the seven ecosystems have qualified products and business models. LeTV has become the only business with stable profitability in the seven ecosystems. If these businesses can make stable profits and cover the state of burning money from other businesses, then LeTV’s games can continue to be played.

Jia Yueting’s bet is whether the stock price declines or the subsidiary profits, which one happens later.

It’s a pity that his stall was too big in the end, and he went to the sports industry and the automobile industry where there are no tens of billions of yuan and no admission ticket at all.

No matter how much money the film industry team and the hardware team make, they can’t hold back the prodigal squandering everywhere.

With the benefit of the primary and secondary markets exhausted, the LeTV cycle finally collapsed. The money of countless investors turned into a bubble, ranging from ordinary A-share stockholders to old Jianghu Sun Hongbin, with no survivors.

He lost this round.

But the interesting thing is that in the magical year of 2020, new energy vehicles blew a gust of wind, the three major domestic electric car stocks soared all the way, and big car companies entered the market one after another, making this industry suddenly enter the spring of capital .

It just so happens that Jia Yueting has some car-making heritage accumulated during the LeTV period.

Hedong for thirty years, Hexi for thirty years. Riding on the east wind, all concepts related to car building started to soar in price. The price of FF has finally reached the level that allows the market to re-examine Jia Yueting.

Furthermore, car manufacturing, a pillar industry of the national economy, has more imagination than video sites, so Jia Yueting has a turnaround.

But what about Jia Yueting himself? Did he do anything? No, he is still the Jia Yueting who does not return home. He has not changed, what has changed is the direction of the times.

Capital is ruthless, and it does not sloppy when abandoning a person.

But capital is fickle. It loses disappointment at the trough, and it reappears at the peak.

Capital is even more forgetful. No matter how unreliable Jia Yueting has been in the past, capital will ignore the predecessors when it comes to making money.

As I said in the past content, capital will always have the next game.

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