Chinese tech company, or known legally as Leshi Internet Information and Technology, is edging close to becoming delisted from the stock market following the announcement of its disappointing performance last year. The Beijing-based tech firm formerly hailed as China's next tech titan, reported massive losses for the third consecutive year.

One of China's largest online video companies, founded by embattled entrepreneur Jia Yueting, reported a loss of around $1.6 billion for 2019. This was a significant jump from the $590 million loss it reported in 2018. Over the twelve months in 2019, the company's revenues dropped by over 69 percent to only around $70 million.

According to current stock market rules, the company could be delisted from the Shenzhen Stock Exchange is it fails to regain a positive net worth within its next financial year. The company's listing was previously suspended back in May last year after it reported negative assets of over $430 million for the previous year.

Leshi Internet Information and Technology was originally listed on the ChiNext technology board in Shenzhen in 2010. During that time, the company was hailed by investors as China's possible answer to the United States' Microsoft and Apple. The startup was at one point one of the most expensive stocks on the market when it had a market capitalization of over $24.33 billion during its peak in 2015.

In the years that followed, the company's overly-ambitious expansion strategy resulted in mounting debts. In 2017, the company posted its first annual loss of around $1.66 billion. One of China's largest developers, Sunac China Holdings, attempted to reinvigorate the company by injecting more capital through an 8.6 percent stake purchase worth $2.2 billion. The transaction made Sunac China Holdings the company's second-largest shareholder.

Sunac China Holdings launched an overhaul of the company and sent its own personnel to reorganize its operations. Unfortunately, the effort failed and the Leshi continued to hemorrhage money. Last year, the company's valuation plummeted to only $960 million.

Analysts have pointed out that the massive fall in its stock may very well, lead to its eventual delisting and possibly its complete collapse. That would mark the end of a sorry saga that will serve as a rude awakening to investors and other startups.

The Chinese government has been encouraging capital markets to lower listing thresholds to bolster innovation and to encourage budding startups. Last year, exchanges in China for the first time allowed unprofitable companies backed by foreign funds to list publicly. This could, however, turn out to be a double-edged sword, some analysts have pointed out.