Days after Chinese hardware maker LeEco launched in the US followed by a dramatic event in San Francisco, the billionaire chairman of the company has admitted that his company is running out of cash to maintain a headlong rush into businesses from electric cars to smart phones.

Jia Yueting, the co-founder of the company wrote a long apology letter to shareholders and pledged to cut his salary to 1 yuan (15 cents), reduce LeEco’s madcap pace of expansion and move the company towards growth.

Well, seeing their marketing strategy for the US, no one saw this coming. Jia said,

No company has had such an experience, a simultaneous time in ice and fire. 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.

In the apology letter, Jia has mentioned the measures that LeEco will adopt to save its boat from drowning. Like cost-cutting programs, decreasing subsidies for customers and focusing on existing businesses instead of new ones.

This definitely looks like they tried to bite more than they could chew. This is exactly what Sandy Shen, a research director with Gartner Inc. thinks. According to him,

The Company spread itself too quickly. They have a big ambition to create an ecosystem for different devices, not only for phones and TVs and set-top boxes but for vehicles. They have a big ambition that is too big to swallow at this moment.

If we go back to history, Jia is self-made billionaire who started with working in an IT at a local tax bureau. He then founded Leshi Internet Information & Technology in 2004, one of the first companies in China to stream TV shows and movies to paying subscribers. He entered the smart TV businesses in 2013 and the smart phone market in 2015.

LeEco, was then designed to introduce the so-called “Netflix of China” to the US. It was formerly known as LeTV, which was the world’s first public video company. It is the only company among China’s major Internet companies which is completely domestically funded. It is listed among China’s A-share stock market with the highest value in China’s Growth Enterprise Market board.

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