Jia Yueting: US listing is not a liar?

It may be hard for LeTV's shareholders to understand why some people are willing to believe Jia Yueting's dream of building a car and still bet on real money to get high returns from the stock market.

After the news that Faraday Future (hereinafter referred to as FF) founded by Jia Yueting will merge with Property Solutions Acquisition Corp. (NASDAQ: PSAC, hereinafter referred to as PSAC), the calm of PSAC for many days was broken. The turnover rate soared from 15. 19% to 54. 14%, and the share price of PSAC rose 18.69% and 19.57% for two consecutive days. Countless newcomers poured in, expecting the share price of FF to rise after listing.

65438+1On October 28th, FF official Weibo announced that it would go public through merger, and the share price of PSAC rose sharply for two consecutive days.

This kind of madness is no stranger to LeTV shareholders.

The story of building a car also excites them. Under the slogan of "ecological opposition", Jia Yueting told the story of LeTV from video and TV to sports, mobile phones and cars, and ran blindfolded.

The so-called "eco-counter", ecology, refers to LeTV's diversified business, covering many fields, such as TV, mobile phones, LeTV and so on; Transformation is the abbreviation of "chemical reaction", which together is "eco-chemical reaction". In other words, various ecological businesses are mixed together to produce chemical reactions and release huge energy.

A LeTV shareholder has a fresh memory of the glory at that time. "As a leading stock in the front row of the GEM, so many stories, so many products, so many conferences, so many concepts!" "I am even full of hope, waiting for its super car."

Just waiting for a decade-long scam.

The administrative penalty decision and the market ban decision issued by the CSRC on April 2 showed that LeTV had financial fraud, fraudulent issuance and other illegal acts during the period from 2007 to 20 16. LeTV was fined 240.6 million yuan, and Jia Yueting, the then chairman, was fined 24120,000 yuan and banned from the securities market for life.

"Everything went up in smoke." Old investors choose to bear the losses and "cut the meat" at the low point of the stock price. "Remember the eternal motto of the stock market: there are risks in entering the market, and investment needs to be cautious."

However, the label of "liar" has not shattered people's support for making cars in Jia Yueting. On the one hand, it has a high fine and a bad reputation, on the other hand, it has unlimited scenery.

In the PSAC stock discussion forum, many investors analyzed the financing news and recruitment positions of FF, guessed when the first model FF9 1 could be mass-produced, and inferred the listing progress, claiming that "Lao Jia's hope is the car, and as rational investors, we can only look at the car". Some people are even more determined. After Jia Yueting's punishment decision was announced, he sent more than a dozen posts to express his support, saying that "geniuses are all crazy, maybe they are all like liars." .

After the penalty decision of China Securities Regulatory Commission was announced, some investors expressed optimism about FF in PSAC forum.

The reason is that the new energy vehicle market is booming, and Jia Yueting's dream of building a car has been re-evaluated. Since the end of 2020, Internet giants have poured into this industry in various postures. Baidu, Xiaomi and Didi have successively announced their participation as vehicle manufacturers, and Ali, Apple and Huawei have cooperated with traditional car companies as suppliers.

Intelligent electric vehicle has become the new wealth password, and Jia Yueting's seven-year dream of building a car may finally come true. Compared with the recent wave of technology companies building cars, Jia Yueting entered the market earlier, and the second wave of visitors can't help but be compared. There are voices like "everyone is poking" and "getting up early and catching up late". FF said in the prospectus that it is expected that the first batch of FF9 1 electric vehicles will be delivered in 2022.

"First listing, then mass production", can Jia Yueting turn over? Although the fines imposed by the CSRC have reduced market sentiment, investors who buy PSAC are still full of expectations.

"The mass production of the first car can't be said to be successful. In the industry, the first production car usually has the function of testing water, which does not represent the normal level of the brand. " An insider in the smart electric vehicle industry told Phoenix Weekly Finance, "At the same time, it is impossible to judge whether the delivery of FF9 1 in 2022 will be too late. The track of smart electric vehicles is very long and there is a lot of space. Every family can be said to have just started. "

Ten-year scam: Who pays for the dream of building a car?

LeTV's shareholders and supporters have seen Jia Yueting's enthusiasm for building cars.

Jia Yueting is good at coining words, describing this electric car as a "brand-new species" and "completely subverting human cognition of cars", believing that it will fulfill the "dream of transforming the automobile industry for a hundred years".

In 20 17, when he resigned as CEO of letv, Jia Yueting gave the reason that "in order to go all out to achieve the fastest mass production listing of ff9/kloc-0", "please give letv and letv some time". In the next four years, the picture marked "FF9 1" was the only avatar on his social platform and never changed.

For this dream of building a car, the story of the listed company LeTV's capital collapse in 2020 and its final delisting has been told many times, but what kind of chess game LeTV's shareholders and suppliers participated in and what kind of price they paid may have a clearer answer in the punishment decision book announced by the CSRC in April.

The initial conclusion is that investors are forced to pay for business strategic mistakes. Car projects burn money, FF has never been "all day" since its establishment on 20 14, and has been entangled in the problem of lack of money.

In the LeTV system, under the strategy of "ecological counterattack" to make full use of the product line that has been rolled out to expand the business scope, the business involves seven major ecosystems: Internet, content, mobile phones, automobiles and sports, and the stalls are too large, which aggravates the capital crisis, and the funds of other businesses are loaned to car-making projects.

From 20 16, Jia Yueting was exposed to the shortage of funds and many businesses closed down. The loss in that year was as high as138.8 billion yuan, erasing all the profits since listing. Due to the unprofitable rule for three consecutive years, LeTV was terminated by Shenzhen Stock Exchange in May 2020 and delisted in July, with a share price of only 0. 18 yuan.

In response to the notice of Beijing Securities Regulatory Bureau ordering Jia Yueting to return to China to perform his duties, Jia Yueting said that one of the reasons for the closure of LeTV was that "too many industries were laid out at the same time, and the company's management ability failed to keep up in time". He said that the two projects, LeTV and FF, need 40 billion to 50 billion as a whole. He invested tens of billions, and the whole system of LeTV almost collapsed.

Letv shareholders suffered heavy losses. As of July 2020, LeTV was officially delisted, and there are still 280,000 shareholders. A LeTV investor told on the social platform that some people in their LeTV investment explosion group lost nearly 20 million, and some people were forced to sell houses to pay off debts.

Some investors still have confidence and expectation in Jia Yueting. After seeing the news of LeTV's delisting, a shareholder of LeTV firmly believed that "Jia Yueting just failed, and I still can't believe that he is a liar".

In April, 20021year, China Securities Regulatory Commission announced the decision on administrative punishment for the responsible subjects such as LeTV and Jia Yueting.

But investors' real money may be caught in a well-planned dream scam.

In April, 20021year, the China Securities Regulatory Commission pointed out in the decision on administrative punishment of Letv, Jia Yueting, etc. 15, that Letv's initial public offering and listing (IPO) related documents were submitted and disclosed from 2007 to 20 16, and from 20 10 to 20. Did not disclose the guarantees for companies such as LeTV Holdings; Did not truthfully disclose the situation that Jia Mofang and Jia Yueting fulfilled their loan commitments to listed companies; 20 16 Non-public offering of shares constitutes fraudulent issuance.

The truth that Jia Yueting promised to borrow money from LeTV was also disclosed in detail by the authorities for the first time. In 20 15, letv was in financial crisis. Jia Yueting twice announced partial reduction of shares, and promised to lend all the proceeds to the company as working capital, with a loan period of not less than 60 months and no interest.

However, the investigation by the CSRC found that Jia Yueting temporarily lent some of the reduced funds to listed companies for use, and then recovered the relevant loans, which violated the commitment to reduce loans: 2065438+June 2005, Jia Yueting reduced its holdings by 2.6 billion yuan, of which 630 million yuan remained in LeTV; From June 20 15 to May 20 17, LeTV borrowed1kloc-0/3.44 million yuan and repaid1/3.44 million yuan; In 20 17, letv repeatedly reminded us to continue to borrow money, but both Jia Yueting and Jia Mofang expressed their inability to fulfill their commitments.

In the penalty decision, the CSRC stated that Jia Yueting, then chairman of the board, and Yang Lijie, then chief financial officer, played an organizing, planning, leading and executing role in promoting the issuance of LeTV and the financial fraud involved. In financial fraud, they take particularly bad measures such as concealing and fabricating important facts, and the amount of fraud is huge and they are not diligent. They sign the application documents submitted and disclosed and guarantee that the information disclosed is true, accurate and complete, and the illegal circumstances are particularly serious.

Jia Yueting was punished for his bad behavior. The CSRC fined LeTV and Jia Yueting about 240 million yuan respectively, and the amount of the fine was 5% of the funds raised by LeTV. At the same time, Jia Yueting, who organized and planned fraud, was sentenced to life-long ban on the securities market.

However, it is not so easy for LeTV investors to recover their losses.

The ability to pay is a big test. Zhang Yun, Jiangsu Zhenze Law Firm, said in an interview with the media that Jia Yueting promised to reserve no more than 65,438+00% in the creditor trust for the contingent compensation of LeTV shareholders in the personal bankruptcy proceedings in the United States. Therefore, there is hope for investors to claim compensation, but it is foreseeable that this process will be very long and tortuous. Judging from the current reports, LeTV has tens of billions of foreign debts, and it is difficult to determine whether investors can get compensation after winning the case.

FF Listing: Jia Yueting's Last Card

In the case of heavy fines imposed by the CSRC, FF is already the last card in Jia Yueting's hand to a great extent, and whether it can be turned over depends on the listing progress of FF.

Life-long ban on the securities market has cut off the possibility of Jia Yueting floating in the domestic capital market. The administrative penalty decision issued by the CSRC shows that Jia Yueting may not continue to engage in securities business in the original institution or serve as a director, supervisor or senior manager of the original listed company or unlisted public company, or engage in securities business in any other institution or serve as a director, supervisor or senior manager of other listed companies or unlisted public companies.

China's policy has limited influence on FF's backdoor listing in the United States, but Jia Yueting, as the "chief product and user ecologist" of FF, was found to have been "faking for ten years", which may still affect the evaluation of FF by investors and the market.

In the S4 listing document, FF reminded that "founder Jia Yueting is closely related to FF's image and brand, and the media's attention to negative reports may have a significant negative impact on Faraday's future valuation and investor confidence. This negative report may also lead to questions from securities regulators in relevant jurisdictions where Faraday will conduct business in the future. "

Another important influence is that the production and marketing market of FF is bound to contact with China. FF revealed in the roadshow materials that thanks to the support of Geely Holding and "domestic first-tier cities", FF will set up production bases in the United States, China and South Korea. The domestic production base is expected to supply 6,543,800+to 250,000 vehicles annually from 2025, and China is also one of the three target markets of FF.

However, compared with the influence of Jia Yueting's reputation on FF's future, the problem it faces now is more urgent-FF is short of money.

FF showed a beautiful plan in the listing document: the first batch of FF9 1 was delivered in 2022, and the sales volume in that year was 2,400; In 2024, the sales volume of three vehicles was 654.38+01.3 million; And in 2025, the sales volume of four cars was 302,000. The rapid growth of sales has led to a sharp increase in income. FF predicts that the revenue in 2022 will be $504 million, and in 2025 it will be $265,438+45 million, an increase of about 465,438+0.5 times. This is also an important reason why FF persuaded PSAC, a special purpose acquisition company, to cooperate.

S4 listing documents show that FF expects its revenue to reach 210.445 billion yuan in 2025.

The vision is beautiful, but the reality is embarrassing.

After the foundation of 20 14, the road of FF mass production is tortuous, with 42 sample cars of FF9 1 and assets before mass production, but mass production has not been realized so far, so there is no revenue account and the operating capital pressure is obvious. By the end of June 65438+February 3, 20201,the accumulated loss of FF was $2.39 billion, and the working capital deficit was about $689 million. In the same period, FF book cash was $65,438+0124,000, which was a huge gap.

If it can be listed smoothly, the financial pressure of FF will be alleviated. According to the listing documents, the merger and listing of FF is expected to be completed in the second quarter of 2002 1 year, which will provide FF with about1billion dollars.

However, the expected financing of backdoor listing still cannot meet the funding needs of FF. At the online investor briefing held by FF and PSAC on April 7th, the CEO of PSAC said that the first thing that can be predicted is that in the next 65,438+02 months, at most $377 million will be needed to maintain the operation of hanford factory and other testing, verification and certification expenses.

"Once we prove our execution ability and people experience this car, the cost of capital will drop sharply. Our plan is to prove the execution of this model again and then raise more funds in the next few years. " He said.

To build a new automobile force, everyone should learn from Jia Yueting?

In the second wave of car-making wave initiated by Baidu, Xiaomi, Didi and other technology companies, some people feel aggrieved about Jia Yueting's dream of car-making, and think that one of the major problems of his failure is that his vision is too advanced, and future generations "learn from Jia Yueting" in ecological construction.

Jia Yueting is undoubtedly the first group of domestic car-making forces in terms of admission time. FF was founded on 20 14, and now it has successfully become a "new force for making cars". Established in the same year as Weilai Automobile and Xpeng Automobile, Li Xiang, the founder of Li, has not yet entered this industry.

FF, as an automobile project under the LeTV system, was born out of Jia Yueting's "ecological" strategy, and it belongs to the concept of "ecological opposition" with Internet, content, mobile phone and sports.

Jia Yueting's "ecological opposition" seems to be quite similar to the argument that many scientific and technological enterprises emphasize "improving ecology" and "enhancing coordination" when building cars.

Baidu CEO Li Yanhong said in the 2020 financial report that Baidu, as an AI eco-company, will seize the huge market opportunities in artificial intelligence fields such as cloud services, intelligent transportation and intelligent driving. Xiaomi CEO Lei Jun said in the rice noodle activity on April 6 that the smart ecology is a whole, including smart bracelets, smart phones, smart home appliances and smart cars.

An insider in the smart electric vehicle industry told Phoenix Weekly Finance that the wave of technology companies starting in 2020 began to emphasize the "ecological" perspective. Compared with simply understanding the smart electric vehicle as a new intelligent terminal to obtain a huge user traffic entrance, a new wave of car-making forces hope to bring the smart electric vehicle into the ecosystem as a link with other businesses.

However, he reminded that Jia Yueting's ecological view is an enlightening concept, but it cannot be simply said that technology companies are learning from Jia Yueting. Ecological construction is not a castle in the air. In an ecology, there must be at least one dominant species at first, and in LeTV ecology, no business can support the ecology, including cars.

This is one of the differences between technology companies entering the market to build cars and LeTV investing in automobile projects. When Letv entered the automobile field, except Letv, all other businesses were losing money, and all systems failed to occupy the leading market position in the industry.

The bigger difference is that the production and market of intelligent electric vehicles in China have changed greatly. Under the warm wind of industrial policy, compared with the initial stage of FF, the supply chain and OEM mode of smart electric vehicles are more mature and the manufacturing threshold is lower.

The market acceptance of electric vehicles is also increasing. After the exploration of the first wave of new car-making forces such as Tesla, Weilai and Tucki, consumers' recognition of electric vehicles has improved. According to the statistics of China Automobile Industry Association, the sales volume of new energy vehicles in China in 2020 will be 654.38+0.367 million, with an increase rate of 654.38+0%. It is expected that the sales volume will increase even faster in the next few years, reaching 5.424 million vehicles by 2025.

Electric smart cars are becoming the darling of the capital market. The new car-making forces that started at the same time as FF have proved that Weilai's share price once fell to $65,438+0.65,438+09 per share, and it reversed in less than two years. The highest price per share rose to $66.99, soaring more than 60 times, and its market value surpassed many established car companies such as BMW and Daimler. The highest share prices of Xingpeng Automobile and Li are 4.9 times and 4. 1 times of the issue price respectively.

In contrast, the pace of FF is much behind. Its listing documents show that FF's first production car will be delivered eight years after its establishment.

However, the above-mentioned smart electric vehicle industry insiders said that if it can be delivered smoothly, it is not too late for FF to join. "The smart electric car track is still in the early stage of development and has not yet reached the market stability period. Similar to the stage when HTC and Gionee dominated the mobile phone market, the current mobile phone giants Huawei and Xiaomi did not rise at that time. For all players, the market space for smart electric vehicles is still very large. "

Author | Swinwin

Editor Wang Biqiang

Do you think Jia Yueting is a liar or a dreamer?