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Xiaomi Chief Appears to Lose 1 Billion Yuan Bet

Bloomberg News
Xiaomi Chief Appears to Lose 1 Billion Yuan Bet

(Bloomberg) -- It appears Xiaomi Corp.’s chairman Lei Jun may have lost a 1 billion yuan ($149 million) bet.

He wagered in a high-profile televised event in December 2013 that the smartphone maker’s revenue in five years would exceed that of Gree Electric Appliances Inc., predicting that an online-driven world of consumer electronics was about to disrupt the economy.

While the bet didn’t specify a particular measure of revenue, air conditioner maker Gree on Sunday reported revenue of 198 billion yuan for 2018, about 20 billion yuan more than Xiaomi during the same period when the tech firm missed analyst estimates. Xiaomi’s shares have dropped 30 percent since listing in Hong Kong in July.

Whether Lei must now make good on his bet with Gree chairwoman Dong Mingzhu is unclear. His dare in 2013 was regarded as an upstart challenge to one of the nation’s established heavyweights -- and a company that at the time out-muscled Xiaomi in terms of everything from revenue to factories and employees.

A Xiaomi representative declined to comment when contacted by Bloomberg News on Monday. A spokesperson from Gree declined to comment.

"Let the entire nation be our witness, if our revenues beat Gree’s in five years, Chairwoman Dong, please pay me one yuan," Lei said during the program broadcast on national television, as Alibaba Group Holding Ltd. founder Jack Ma and Wang Jianlin of Dalian Wanda Group Co. stood on the stage. Gree’s Dong replied: "Let’s make that bet 1 billion".

Lei has yet to publicly address his plans regarding the bet in a country where gambling is illegal on the mainland.

--With assistance from Daniela Wei and Gao Yuan.

To contact Bloomberg News staff for this story: April Ma in Beijing at ama112@bloomberg.net

To contact the editors responsible for this story: Sofia Horta e Costa at shortaecosta@bloomberg.net, David Watkins, Robert Fenner

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