Vizio Inc.’s proposed buyer, LeEco, is trying to sell its recently purchased U.S. headquarters in San Jose as the company moves to improve its depleting cash position, according to a Reuters report.
It’s the latest red flag that the Chinese conglomerate is struggling to fund its $2 billion buy of the Irvine-based consumer electronics brand. The deal was announced in July and projected to close by year-end.
Vizio co-founder William Wang told the Business Journal in February that a deadline was looming to finalize the deal but said he couldn’t discuss the date, citing nondisclosure agreements.
A LeEco spokesperson told the Business Journal last month that “the Vizio deal is still going through regulatory review, so I have no updates at this time.”
U.S. regulators approved the sale more than a month ago. Chinese counterparts have been known to hold up deals involving U.S. companies, primarily when Chinese employees are affected.
Vizio’s entire companywide employment of 477 through December is in the U.S., about 230 at its Spectrum headquarters, according to Business Journal research.
The LeEco spokesperson said she wasn’t familiar with the closing deadline and didn’t respond to several emails from the Business Journal inquiring if it had passed.
The company provided a statement about its 49-acre Silicon Valley EcoCity project, which was planned to house about 12,000 workers.
“LeEco has been working to identify additional investors as well as a development partner,” it says.
The Vizio transaction first raised concerns among analysts in November as chatter picked up that LeEco hit a cash crunch due to expanding product lines and markets.
LeEco Chief Executive and founder Yueting “YT” Jia in a letter to employees said, “We blindly sped ahead, and our cash demand ballooned. We got over-extended in our global strategy. At the same time, our capital and resources were in fact limited.”
Vizio was the sixth largest private company headquartered in OC last year based on $3.5 billion in 2015 sales.
Intelligence Spotlight
Irvine-based security software maker CrowdStrike Inc. played a prominent role in the first House hearing regarding Russia’s alleged tampering in the U.S. presidential election.
Rep. Adam Schiff, the ranking Democrat on the House Intelligence Committee, singled out the company in his lengthy opening remarks for identifying last year’s breach in Democratic Party computers and linking them with Russian intelligence services.
The Democratic National Committee hired CrowdStrike to halt the breaches. The company confirmed to the Business Journal at the time that it thwarted two separate attacks that infiltrated DNC networks and obtained several types of documents, including research on eventual winner Donald Trump and confidential information taken from Democratic presidential nominee Hillary Clinton’s personal email server.
CrowdStrike co-founder and Chief Technology Officer Dmitri Alperovich, and service president and Chief Security Officer Shawn Henry testified at the hearing.
Esports Investment
Rob Pardo, co-founder of Irvine-based video game maker Bonfire Studios Inc., is among investors behind esports team Cloud9.
The longtime creative director at Blizzard Entertainment Inc. and lead designer on the “World of Warcraft” and “Diablo” franchises launched Bonfire last year with noted developer Min Kim after raising $25 million from Silicon Valley venture capitalist Andreesen Horowitz and Los Angeles-based Riot Games, which develops the popular esports tournament League of Legends.
Santa Monica-based Cloud9 raised an undisclosed sum in a Series A round led by Daniel Fiden of FunPlus Ventures, a Beijing-based mobile social-gaming company. The company raised about $2.8 million late last year in a private offering, according to a regulatory filing.
