Chinese Bitcoin Miner Maker Begins Share Subscription, its U.S. IPO May Be Finally Realized

On the evening of June 20, an app for U.S. stocks showed that Chinese bitcoin miner manufacturer Ebang started a subscription for new shares from 22:00 on June 19 to 10:00 on June 24.

It is reported that the scheduled timetable of Ebang’s U.S. IPO is June 26. This means that Ebang’s U.S. IPO is almost a foregone conclusion, and the second listed company in the crypto mining industry is about to be born.

Information from its prospectus

1. It is planned to be listed on NASDAQ with the securities code of “EBON”.

2. About 19 million shares are to be issued, with a range of $4.5 to $6.5 and a scale of $86.94 million to $125 million. It is estimated that its market value may be between $590 to $850 million.

3. The purpose of the fund-raising is to develop and launch new machines; corporate branding and marketing activities; expand the overseas business and new business.

Four uncertainties

1. As bitcoin mining block reward halved, and network hashrate soared to 11E, mining is becoming less profitable.

2. The Covid-19 epidemic has affected the global economy, and the influence has not disappeared.

3. After Luckin coffee counterfeiting incident, Chinese concept share is facing a trust crisis.

4. Another Chinese crypto giant Canaan, who went public last year, its stock price has fallen from $9 to $2, with a dismal performance.

Who is Ebang?

Like Canaan, Ebang is also an Hangzhou-based bitcoin miner maker.

As early as in January 2010, when the company was founded, its business was mainly the production and development of communication network access equipment. Until the end of 2016, it launched the first bitcoin mining product, Ebit E9+. Later, after the bull market in 2017, Ebang basically established the top 3 status n the mining industry as Ebit E10 gave an outstanding performance.

In the latest report of BitMEX, Ebang’s ASIC mining machine market share ranks fourth after Canaan, and there is still a big gap with the top three in terms of proportion.

Judging from the financial report data it disclosed. Hu Dong, the founder of Ebang, has the most shares, accounting for 41.82%. The company’s revenue is mainly composed of three parts, but the sales of bitcoin mining machines and accessories are the largest, accounting for 82.4% in 2019. In 2019, the proportion of customers from China is 87.5%.

In 2018 and 2019, its revenue was $319 million and $109 million respectively, but net profit was reduced about $11.81 million and $41.07 million respectively.

In short, according to its statement, the current situation of its declining profitability and cash flow shortage makes it difficult for its cash resources to meet its development needs. Many people interpret Ebang’s IPO as it has no alternative.

“The policy in China mainland is stricter. Though Hong Kong is more tolerant, but naturally it is not as good as the US securities market. From the valuation point of view, it has a higher valuation in China, so going to the U.S. for listing can be said to be second best.”

Said Cheng Xiaoming, vice chairman of the blockchain special committee of China Communications Industry Association. He thinks the U.S. generally rejects or even suppresses Chinese concept share at present, but it does not mean that it will not give up at all, it requires Chinese enterprises listed in the U.S. to accept the audit and due diligence of U.S. institutions and make the corresponding declaration according to the relevant regulations.

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