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From Xunlei to Xunlei: Chen Lei's three ups and downs

via:DoNews     time:2020/10/11 4:01:18     readed:802

This is a situation no one thought of. Chen Lei joined Xunlei six years after being sued by former owners for corruption. According to a notice released on Oct.8, the Shenzhen Public Security Bureau has filed an investigation into the former CEO Chen Lei et al. Lei Jun used to be Chen Lei's idol. In 2014, when Lei Jun invited him to join Xunlei, Chen Lei, already head of Tencent cloud, chose to accept it, but what he did not expect was that the drama of "your help ", singing to the end, was a run away.


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From an outsider to a leader

Founded by Zou Shenglong in 2003, Xunlei is the common memory of a generation of Internet users. Its software installed capacity was once second only to Tencent's launch in QQ,2007 year. The two software from download to play together to solve the user's pain point at that time.

Since $200 million in the e-round financing comes from Xiaomi, Xiaomi's shareholding ratio is as high as 28.3% after Xunlei's listing, which will increase to 41.8% if Jinshan software is included. For the company's founding team, this means that their identity is quietly changing from founder to professional manager, but falling into the joy of listing At that time, they did not expect what would happen in the future.

In addition to funds, Lei Jun also brought a new person to Xunlei, who was Chen Lei, former general manager of Tencent cloud computing. In November 2014, Chen Lei joined Xunlei as which is also the first CTO. in the true sense of Xunlei

In an interview this year, Chen Lei said he did not initially care about cloud computing, but Lei Jun had a word that touched him: do you want to be a company that has the final say?

In 2017, after being CTO and CEO, Chen Lei became a thunder CEO, and realized the desire to say "has the final say". But this time, it is more like a victory for the old team in the battle of millet, rather than a peaceful evolution.

After the listing of Xunlei in 2014, the company's development was not smooth. In the long run, the first decade of downloading tools in China's Internet was tuyere. With the progress of Internet infrastructure, in the second decade, Xunlei's biggest rival, the QQ whirlwind incubated in Tencent, was not so much defeated by xunlei as it was actively retreated by the other side It is intended to continue to compete in this "chicken ribs" market.

At that time, Thunder's revenue mainly came from advertising revenue and member income (cloud on demand, etc.), the former was a common traffic realization model for early Internet enterprises, but it also significantly reduced the user experience. And as Internet users reduce the stickiness to download tools (after all, the speed of the network has improved), revenue will also decrease.

Lei Jun, who calls out the idea of "wind outlet", naturally knows this truth. What he sees in Chen Lei is his potential in cloud computing business, rather than trying to make him a general CTO for Xunlei's old business.

At that time, Zou Shenglong and other old team members also made a lot of efforts to develop new business, such as games, live broadcast, etc., but they basically failed. In 2014, the video industry began a mixed battle of variety shows. Xunlei, who was short of funds, failed early and sold it at a price of 130 million yuan in April 2015. On the contrary, it was Chen Lei's cloud computing and blockchain business, which brought income growth 。

In June 2015, Chen Lei released the network service product "star domain CDN". Lei Jun personally served as its platform and called it Uber in the CDN field. He also said that the real reason for investing in Xunlei was that he was optimistic about "star domain CDN": "after the news of our investment in xunlei came out, we thought that we were investing in downloading, investing in the membership business of Xunlei, and we were investing in Xunlei. Of course, these businesses were also doing very well What we're really looking forward to is today's star field.


From left to right: Zou Shenglong, Lei Jun, Chen Lei

Since then, the stock price has been on the market. In the six years of Xunlei's listing, such ups and downs have occurred three times, each of which is closely related to Chen Lei, and the market value of Xunlei is also in general with Chen Lei's personal experience. Several ups and downs finally hit the bottom.

July 2017, Chen Lei became Thunder CEO, he later commented, should not be this CEO, this is a feud with the old team. At that time, Storm Player listed on the gem, the stock price rose, Zou Shenglong hopes for a management acquisition of Thunder, the idea and major shareholder Xiaomi, the idea of a disagreement, eventually unable to reconcile, Chen Lei in this context became a new CEO.

Not long after, in October, Xunlei broke out into internal strife between the old and new factions.

In 2015, Yu Fei, the former legal officer of Xunlei (also the old man of Xunlei), established Xunlei big data to develop financial business with the support of Zou Shenglong. The core business of this company is P2P, which represents the interests of the founding team. Xunlei accounts for 28% of the shares and uses the brand and flow of Xunlei. At that time, the risk of P2P thunderstorm had gradually emerged. Chen Lei was dissatisfied with this, and poked the problem to the board of directors, and had a fierce conflict with Yu Fei and others.

He later told himself that Zou Shenglong found him and said that he had "neither a position nor a position to manage this matter". Zou Shenglong also proposed a plan to wholly purchase Xunlei big data with 50 million yuan of Xunlei flower. However, it was rejected by the core directors, which was equivalent to the purchase risk of 50 million yuan of Xunlei flower and cash out the senior management team of Xunlei big data.

The infighting ended at the end of 2017, with Chen Lei and others winning. The management of Thunder big data bought back all of its stake in big data and switched from Thunder to Touch Dog. Yu Fei was removed from all positions in Xunlei Group on November 29. On December 12, Zou Shenglong stepped down as chairman, with Xiaomi co-founder Wang Chuan as chairman.

Xunlei entered the "millet era", and Chen Lei became Xunlei's "power faction".

Failure of Thunderbolt Transformation

In other people's evaluation, although Chen Lei is a technical background, but also has a business mind. In fact, from the change of Xunlei's income composition, we can see that Chen Lei's position is inevitable.

Early Thunder revenue came mainly from advertising and members, but advertising revenue has long been significantly reduced. After 2016, membership revenue began to shrink, but revenue from businesses such as cloud computing began to grow rapidly. In the critical fiscal year 2017, cloud computing and other business value-added revenue reached $94.5 million, accounting for nearly half of the year's total revenue. And is still growing fast ($120 million in 2018, accounting for 51.7 percent of total revenue).

In October 2017, Xunlei launched the virtual currency "joker coin". From the perspective of the mode, it is very similar to issuing virtual currency: by purchasing a 399 yuan virtual machine, you can choose to withdraw 500 yuan (equivalent to the investment with an annual yield of 12%) in two years, or mine to get the playing customer currency, and then sit down and bring benefits from the appreciation of the playing guest currency. In the first year, the daily output was 1.64 million units per day, and then the output was halved once a year - which is exactly what the buyer knows.

This product has been popular since it was launched. On Taobao, the official price of Playboy cloud, which has an official price of 399 yuan, has been fried to more than 1300 yuan. It is reflected in the capital market that the stock price of Xunlei, which has been silent for a long time, has experienced a big explosion, rising from about $4, and reaching a historical peak of $27 at the end of November. At this time, the profit-making board of directors is naturally no exception Yudi chose to support Chen Lei and let the founding team out of the game.

It should be said that Chen Lei was right in questioning P2P. At that time, Xunlei big data did have great risks. In February 2018, shortly after breaking away from the Xunlei brand, Jingou was broken in the capital chain. If it was retained or even wholly-owned, it would be equivalent to burying a thunder for xunlei. However, is there no risk in what Chen Lei did? As a failure party, Xunlei big data also announced at the end of 2017 that playing with customer currency was illegal fund-raising by ICO in disguise - this is not so much a battle of routes, but more like a "dog bites dog" farce of P2P and ico.

At the end of 2017, it was Chen Lei and Thunder's best after which Thunder went from bad to worse.

Chen Lei has his own transformation plan for Xunlei. After he gets the company's dominant power, he plans to gradually stop Xunlei's download business. The reason is that many download businesses involve yellow or copyright issues, which have great legal risks, and their own value is constantly decreasing. Instead, Chen Lei's cloud computing and other value-added services are mainly concentrated in other groups What's more, although Chen Lei has become CEO of Xunlei, he seems to have spent more energy on netheart, and the treatment of netheart in all aspects is better than that of Xunlei's old business.

If Zou Shenglong and others have not adapted to the transformation from the founding team to the professional manager, Chen Lei seems to be a professional manager, doing things as an entrepreneur.

On the other hand, Thunder's share price the customer cloud share price, like a bubble, eventually can not avoid the result of blowing.

First of all, as early as September 4, 2017, the people's Bank of China and other seven departments jointly issued the "notice on preventing the financing risk of token issuance", which stopped financing activities such as initial token issuance (ICO) through issuing tokens, identified ICO as illegal fund-raising, and shut down domestic bitcoin trading websites such as bitcoin China and firecoin.com. Although Xunlei said on its official website that "playing customer currency is based on the smart hardware of" joker cloud "and relying on the digital assets of sharing economic cloud computing and blockchain technology" rather than ICO, a platform for trading and hyping the playing coin appeared on the network.

After that, the name of Joker cloud was changed to "link", but it was still named as ICO in disguise. In January 2018, the China Internet Finance Association said that Xunlei's "Linke" and the mode of issuing virtual digital assets (IMO) with mining machinery as the core was risky. Moreover, due to restrictions on trading, the currency could not be realized. Later, it was converted to Xunlei customer service. This is actually similar to Tencent's QQ coin, which sets the official price of playing Keyuan (about RMB 3-4 yuan for each player). As a result, it lost the space for speculation and directly pulled over the stock price of Xunlei.

At the beginning of 2018, Thunderbolt's U.S. stock investors filed two class-action suits against Thunder because it made false statements about its legitimacy, knowing that it was illegal to ICO( the initial issue of tokens), making the stock price significantly affected.

However, this is a small trouble, the real trouble for Chen Lei is that his transformation of Xunlei is not successful.

According to Thunderbolt's results, total revenue in 2017 was $201.9 million, while total revenue in 2019 fell to $180.7 million, and the loss expanded from $37.81 million in 2017 to $53.42 million in 2019. During his CEO, Thunder did not do much and did not develop excellent commercial projects.

Until September 2019, Xunlei's share price has continued to drop to about $2, and then in October, the share price has experienced a small recovery, mainly driven by the official setting the blockchain as an important breakthrough in independent innovation of core technology. However, the blockchain business of Xunlei itself did not stir up, and its share price soon fell back.

This is also Chen Lei period, Thunder market value for the last obvious increase.


Change of Xunlei stock price

Take over, go abroad, file a case

At 10:00 a.m. on April 2, 2020, netheart company was taken over by Xunlei, and then Xunlei reported to Shenzhen Public Security Bureau and charged Chen Lei. At the same day's board meeting, Chen Lei was removed from office, and Li Jinbo, the major shareholder who reached a share exchange agreement with Lei Jun, became the new chairman and CEO. Chen Lei later said that he was at home with a fever at this time and knew nothing about what happened.

However, there are also media reports that on the day of his dismissal, Yao, his former driver, invited some security personnel of netheart company for dinner that night. On the pretext that he was entrusted by the leadership to go to the company's computer room to do business, he used the security personnel's access card to carry five 1t hard disks into the company's computer room at 23:30 p.m., in an attempt to steal the company's data and source code.

In this process, Yao out of the computer room smoking was found by the company monitoring system, the company immediately implemented remote access control, Yao into the computer room to obtain the data of 5 hard left in the computer room, Yao absconded after the incident. April 3, the company reported to the local police station, but Yao refused to come forward and people are missing.

It is also understood that Yao is suspected to be the cousin of Dong Hao, a former senior executive of Xunlei, who was the general public relations officer of Tencent cloud and had a lover relationship with Chen Lei. Later, he successively became the vice president of netheart technology and senior vice president of Xunlei. During this period, he had a son with Chen LEIYU. In the field fight in 2017, Dong Hao repeatedly spoke on behalf of Xunlei and won the "outstanding contribution bonus".


Senior Vice President of Thunderbolt Group, Dong Bing, Vice President of Netheart Technology

Xunlei's accusation against Chen Lei is suspected of fictitious trading links, embezzlement of company assets, fabrication of false contracts and arbitrage of company funds, involving a huge amount of money. According to reports, evidence from Xunlei's new management shows that a Xunlei bandwidth provider named "Xinghe" is actually a company controlled by Chen Lei. Chen Lei transferred a huge amount of funds to Xinghe by various illegal means, and tried to transfer the core technical personnel of Xunlei company to Xinghe Company by deception.

In response, Chen Lei said that a large part of the company's new business is bandwidth business. Because the Ministry of Industry and Information Technology explicitly stipulates that bandwidth can only be purchased from licensed enterprises, in order to avoid the risk of the net core, it bought the shell company.

But in addition to occupation, Xunlei also accused Chen Lei of embezzlement during his term of office. He was suspected of embezzling huge amounts of company funds by means of false reimbursement and excessive wages. He was also suspected of misappropriating tens of millions of funds of the company for illegal speculation prohibited by the state.

In addition, there are many bizarre plots to be revealed. For example, netheart signed a service agreement with a third party, and hired two technical experts from Hegang, Heilongjiang Province, as the technology consultant of blockchain. However, after investigation, it was found that the real identities of the two experts who served as the technical consultants of blockchain of netheart company were two peasant couples in Hegang, Heilongjiang Province, who were actually relatives of Dong Hao in his hometown of Hegang, Heilongjiang Province. Finally, the consulting fee was remitted to Dong Ying.

It is also reported that many key positions of the company have been installed with Dong Ying's Hegang fellow townsmen and girlfriends, who have facilitated Chen Lei and others in fabricating transaction links, preparing false contracts, and arbitraging company funds.

Chen Lei himself and Dong cod, as early as early as April was removed from office, against the epidemic has not returned. Overseas Chen Lei once said that the complaint from Xunlei was an unwarranted murder, but at that time clean and clean abroad and now delayed return, so that his words in the authenticity of a big discount.

The future of Xunlei, which has been almost abandoned by Xiaomi system and twice in a few years, is hard to be optimistic.

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