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Bitcoin Miner Maker Ebang Files for a $100M US IPO

Ebang Worldwide Holdings, one of many main producers of bitcoin mining tools, is taking one other stab at going public, this time farther from dwelling and with a smaller fundraising goal.

The Hangzhou, China-based agency goals to lift as much as $100 million from an preliminary public providing (IPO) within the U.S., in keeping with an April 24 submitting with the U.S. Securities and Alternate Fee (SEC). The Chinese language agency can be listed beneath the ticker image EBON on the New York Inventory Alternate or Nasdaq. Loop Capital Markets in Chicago and AMTD World Markets in Hong Kong are the underwriters on the deal. 

That is Ebang’s second try and go public after it failed to take action on the Hong Kong Inventory Alternate (HKEX) in June 2018. The goal proceeds from that would-be IPO had been estimated to be $1 billion. 

Based in 2010, Ebang is among the many earliest China-based {hardware} corporations, reminiscent of Bitmain and Caanan Inventive, to make application-specific built-in circuit (ASIC) chips and fabless built-in circuits (ICs) for bitcoin mining machines. Chinese language miners contribute over 65 p.c of the computing energy on the Bitcoin community. 

Ebang generates over 82 p.c of its income from making bitcoin miners. It raked in $109 million in income final yr, down almost 66 p.c from 2018. Its web loss for 2019 greater than tripled to $42.four million, in keeping with the submitting. 

The agency confidentially filed for the IPO in February with out disclosing pricing phrases, in keeping with Renaissance Capital. 

Second possibilities

Ebang is certainly one of a number of crypto corporations that didn’t launch an IPO in Hong Kong and later got here to the U.S. for one more shot. 

Rival bitcoin miner makers Bitmain and Cannan Inventive tried to go public on HKEX however their plans fell by means of as a result of native regulators had been reluctant to permit any crypto-related firm listings. 

Cannan later managed to launch its IPO on Nasdaq final December. 

Huobi Group, one of many prime crypto exchanges by quantity, acquired a Hong Kong-based electronics producer final yr in a bid to get listed by means of a reverse takeover. 

Nevertheless, the method has been placed on maintain because of strict mergers-and-acquisitions rules. 

Threat components

Whereas Ebang is not sure of what affect the upcoming halving in Could would have on bitcoin’s value, the agency sees ever-changing rules in China, potential sharp drops within the value and the COVID-19 pandemic as substantial threat components for its income streams, in keeping with the submitting. 

“The numerous drop within the Bitcoin value is anticipated to have a adverse impact on the worth of our bitcoin mining machine stock and incentivize us to extend credit score gross sales,” the agency mentioned within the submitting, referring to the March market crash.  

The Chinese language authorities as soon as deliberate to part out crypto mining companies and didn’t change the supply till a number of months in the past. Various insurance policies from totally different provinces additionally pose a problem for bitcoin miners. 

For instance, Xinjiang, an autonomous area in northwest China, one of many predominant areas that provide low-cost electrical energy for mining farms, warned native mining enterprises that had been working illegally to shut their operations earlier than Aug. 30, 2018. Many small miners that didn’t register with the native authorities had been thought of unlawful on the time. 

The coronavirus outbreak in China has delayed the supply of mining machines from nearly all of the producers to their purchasers. 

“The outbreak of coronavirus COVID-19 in China has resulted in a extreme disruption of social and financial actions in China,” in keeping with the submitting.

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