Bursting bubbles bring billionaires grief

ON MONDAY NIGHT, the Shenzhen Stock Exchange announced its decision to adjust the list of stock indexes, and le.com, a domestic video website that has been mired in a debt crisis for months, was expelled from its startup board. China Youth Daily comments:

Three years ago, le.com was listed as the company with the highest market value on the SSE's board of startups, and Jia Yueting, its head, was called the richest person on the startup board.

Yet le.com is now deep in debt and Jia is included on the list of debtors.

Jia is not alone in his fall from the dizzying heights of wealth. Li Zhaohui, a one-time billionaire from North China's Shanxi province, has also been put on the list of debtors.

There are many reasons that caused their falls, but the major one is that rather than focusing on the real economy they pursued the bubbles of the virtual economy. Li inherited companies worth over 10 billion yuan ($1.52 billion) from his father at the age of 22, yet he soon founded several investment firms. He earned billions of yuan in a very efficient way, then lost the money all just as efficiently.

Jia followed a similar path. Since 2013, his company had been shifting its main business from its video platform to new sectors, and his businesses covered automobiles, smartphones, even internet finance. Earlier this year, these companies started to go bankrupt one after another.

Jia and Li are only two of the adventurers who have sought high, short-term profits by purchasing and merging new companies, through which they told stories to attract more investors. Yet they seldom ran any true business that makes money, and the bubbles they created were bound to burst one day.

The real economy is the foundation of wealth, speculation is doomed to failure.