Vizio plans for an IPO after it got screwed last time

Vizio, one of the biggest TV makers around, almost went public in 2015, when instead the Chinese electronics and entertainment giant LeEco swept in and bought the company for two billion dollars. However, LeEco was less of a stable company than it appeared, and it collapsed shortly thereafter, leaving Vizio in the dust. After a lengthy legal battle, Vizio is ready to try again, planning a 2021 IPO to finally go public. To read about LeEco's collapse, check out this article. https://www.engadget.com/2017-07-20-leeco-jia-yueting-investigation.html Read our full story on Engadget: https://www.engadget.com/vizio-revives-its-plan-to-go-public-131501053.html

Video Transcript

CHRIS VELAZCO: My mom once gave me a really good bit of advice. If at first you don't succeed at getting listed on the New York Stock Exchange because you made plans to merge with a massive Chinese streaming media company that would eventually bail on you and its plans to expand into the United States, try, try again. And that's exactly what Vizio, one of the biggest TV brands in the US, plans to do.

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The company filed for its IPO for the second time this week, and its S-1, the sprawling document that all companies have to file with the Securities and Exchange Commission, is definitely worth reading if you're a fan of financials or the TV industry at large. I say that because it offers a pretty granular look at the company's business. We now know, for example, that Vizio has sold over 80 million TVs since it was founded in 2002, including just over seven million last year.

But it's also worth a look because it has what must be the best introduction to any of these documents I have ever seen, in which founder and CEO, William Wang, briefly tells the story of surviving being on a plane as it crashes into a construction site. He said that finally getting home after that ordeal was one of the best moments of his life. And from that relief and comfort, Vizio was born.

So, in a way, it isn't a stretch to think that trying moments are key to the company's work. The whole thing was born in the aftermath of a terrible accident, and Vizio spent years taking on massive competitors like Samsung and LG. And high on the list of trying moments are the many that followed the last time Vizio tried filing for an IPO.

The year was 2015, and the company was angling to go public so it could raise about $100 or so million fuel its growth. The paperwork was filed, and everything was in place. But before Vizio could even make it close to the Stock Exchange, LeEco announced plans to acquire the company in a $2 billion deal that would see the TV maker take on a new role as part of the Chinese internet giant's plan for global expansion.

Now, I've been calling LeEco an internet company, but that's really just scratching the surface. It was originally known as LeTV, and was probably best known for its online video portal, which people refer to as the Netflix of China, but it branched out hard. It got into movie production and distribution. It started making smartphones. It even dabbled in electric vehicles with the help of Faraday Future, another company spun up by LeEco CEO, Jia Yueting. At one point, it even made Android-powered smart bikes, which I once nearly took a nap on at a CVS event because I wanted so badly for the week to be over, and it had barely even started.

More germane to this little story are its smart TVs, which it did actually sell in the US for a very short time. The fact that you probably don't know anyone with a LeEco TV tells you basically everything you need to know about how those plans worked out, and that's why Vizio seemed so important to LeEco at the time. Rather than try and build up a brand in the US from scratch, it could capitalize on all of the work Vizio had already done.

Unfortunately for everyone involved, regulators were skeptical about the deal, but maybe not the ones you'd think. One might naturally assume that the US government was wary of Vizio's buyout by a Chinese company, but it was actually Chinese regulators that put an end to the deal over concerns that aggressive overseas expansion would undermine its own efforts to stabilize Chinese currency. To our knowledge, LeEco never really coughed up a definitive reason, but it did say Chinese policy factors as a major source of concern.

By the time LeEco announced in April of 2017 that the acquisition was officially off, Vizio was naturally pretty pissed. So it sued the LeEco two months later because the company allegedly failed to pay $60 million of a $100 million breakup fee. For what it's worth, Vizio also said at the time that LeEco was in terrible shape by the time it pitched the acquisition and that it misrepresented its health as a company to kind of grease the wheels.

Very long story short, the two companies eventually settled in late 2018, and that would have been that, except Vizio alleged a year later that LeEco breached that settlement agreement and still owed them a ton of money, and that's pretty much the last most people have heard about this. And as far as we know, Vizio is still trying to get the cash it's owed. We reached out for a comment. We'll update all of this if we learn more.

With all of this in the rearview mirror, it's no surprise Vizio is dusting off its IPO plans again. And while we probably won't see too many bumps in the road between now and the company's stock market debut, Vizio does still face plenty of risks. TVs and sound bars are getting cheaper by the day, which could drive down overall revenue, and it's concerned that people who might buy their smart TVs could use them with third party devices like Rokus and Apple TVs, which means that Vizio would be deprived of the money it would make through its SmartCast OS and the services that tie into it. Surviving one failed IPO was tough enough. If the second doesn't go well, I mean, look, we'll just have to see how it goes.

Anyway, that is our quick look at the first time Vizio year tried and failed to file for an IPO, and I think we can all agree that turned out to be a whole lot juicier and more dramatic than most people probably would have expected. If you have feedback about how we handled the story or if you want to just talk shop about the companies, we'd love to hear your feedback in the comments below.

And just for the record, if you want to learn more about LeEc0's spectacular fall from grace, my colleague Cherlynn Low wrote out a fantastic inside story a few years ago on the matter. We'll link to it in the description. It's definitely worth a read. Thank you, as always, for joining me in my basement and hanging out with me for a bit. We really appreciate your support. Take care of each other, and we'll see you again next time.

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