Hindenburg Research Shorts Chinese Bitcoin Mining Maker; Ebang Continues its Fundraising Spree

Hindenburg Research Shorts Chinese Bitcoin Mining Maker; Ebang Continues its Fundraising Spree

The short-seller argues Ebang makes “extraordinary claims” to be a market leader, which is “backed by no evidence,” resulting in EBON shares dumping.

Short-seller Hindenburg Research is shorting Chinese Bitcoin mining machine producer Ebang International Holdings. This sent the shares of the company (EBON) down 20% to $5.53. EBON shares have lost 63% of their value since the mid-March high.

Ebang made its debut on Nasdaq in June last year, and during this period, it has made three fundraising rounds, one in November and two in February this year alone, raking in $170 million in the last two.

According to Hindenburg, Ebang “claims” to be a leading bitcoin miner maker, but their research “indicates no evidence backs this extraordinary claim.” It further goes on to the point that ever since releasing its final miner in May 2019, its sales have been dwindling to near-zero, “delivering only 6,000 total miners in 1H20.”

The ongoing bull run has fueled a surge in fundraising in the crypto sector, which raised $2.6 billion in just three months, more than the amount raised in the entire last year.

Hindenburg has also been short on another Chinese blockchain company and took short positions in electric vehicle companies, including Nikola Corp, Lordstown Motors, insurer Clover Health, and Kandi Technologies Group Inc in the past year.

According to the firm, its research revealed that instead of using the capital proceeds to develop its business, Ebang has been moving the cash out of the company through “a series of opaque deals with insiders and questionable counterparties.”

Interestingly, this week, Ebang also announced the closing of its previously announced best-efforts follow-on public offering for the sale of 14 million units at a purchase price of US$6.10 per unit, for aggregate gross proceeds of approximately US$85.4 million.

The company intends to use its net proceeds to expand its crypto mining business and for the establishment and operation of the mining farms, crypto exchange, and general corporate purposes.

As we reported, Ebang announced the launch of its cryptocurrency exchange just this week, which Dong Hu, Chairman, and CEO of the company, said, “will not only expand the revenue sources from our cryptocurrency business but also optimize the development of our blockchain industry chain.”

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Author: AnTy

Bitcoin Mining Chip Maker, Ebang Launches a New Cryptocurrency Exchange, Ebonex

Bitcoin Mining Chip Maker, Ebang Launches a New Cryptocurrency Exchange, Ebonex

Bitcoin mining ASIC chip maker, Ebang International, is expanding its business operations by launching a cryptocurrency exchange.

Canada stock exchange-listed firm, Ebang is expanding its crypto mining operations to the secondary market with the launch of a new cryptocurrency exchange, Ebonex. The exchange will register “qualified investors,” allowing them to deposit, trade, and withdraw from their accounts starting today.

The hardware mining giant launched an invitation-only beta testing phase for Ebonex earlier this year following a successful $100 million IPO in 2020. Dong Hu, Chairman and CEO of the firm, stated the exchange was a “result of the continuing investment in research and development.”

“In recent years, we have made a considerable investment in R&D talent recruiting, as well as product innovation and iteration.”

“The launch of our cryptocurrency exchange business will not only expand the revenue sources from our cryptocurrency business but also optimize the development of our blockchain industry chain.”

The company has not been short of R&D endeavors to improve their business operations – or development of chips. Ebang announced in August 2020; they will shift their focus to AI-powered mining chips in 2024 as a bid to be ‘part of building the future chips.’

The new exchange will start with several top crypto assets available, including Bitcoin (BTC), Ethereum (ETH), Polkadot (DOT), Litecoin (LTC), and Chainlink (LINK). However, the report did not disclose which residents and countries will be eligible to participate in trading services on the exchange.

No comment was received from the exchange as of writing.

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Author: Lujan Odera

ASIC Bitcoin Miner Manufacturer, Ebang, to Launch Crypto Exchange Outside China

  • Ebang International Holdings to launch an offshore crypto exchange that can potentially double their income to $200 Million. This, alongside their new consultancy venture which, will supplement their dwindling revenue by 40% in 2020 will work to reduce their overreliance in the ever-volatile cryptocurrency.al

News has now surfaced that Bitcoin equipment manufacturer; Ebang International Holdings intend to unveil a crypto exchange to operate outside China’s jurisdiction. This is in an attempt to generate more revenue for the firm.

The BTC rig manufacturer could see a revenue increment of up to 40% by the end of this year emanating from their new consultancy business that involves managing datacenters for clients. Chief Financial Officer, Chen Lei in an interview with a media outlet remarked at the potential of doubling their earnings to $200 Million with the launch of the crypto exchange. This timeline could potentially be stretched to 2022.

Dwindling Fortunes

Notably, their 2019 revenue of $109 Million was significantly dwarfed by an excess of $300 Million they generated in 2018. Generally translating to net losses in both 2018 and 2019. This is due to their overreliance in the ever-volatile BTC which, has plummeted significantly well below $4000 before stabilizing. The BTC is currently trading at $9154.21 enjoying a market volume of $15911378811 as per this writing.

The Hangzhou-based ASIC rigs manufacturer filed a $100 Million IPO with SEC this year, April. Their share price after, however, shrunk by almost 4% after June 26th IPO to fall below the projected $4. Most of the funds from the IPO would go into the production of next-gen rigs and their overseas expansion campaign.

According to Mr. Chen, almost 10% of the total revenue generated would go to facilitate transaction fees as they seek to set up a regulatory compliant exchange outside China. This was partly due to ongoing purge on crypto activities in China as they march towards realizing their own CBDC, the digital Yuan.

However, it is yet to be seen how the escalating rows between Beijing and Washington will affect Ebang’s access to US capital markets.

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Author: Lujan Odera

China-based Bitcoin Miner Manufacturer Ebang Files for a $100M IPO with the US SEC

The China-based ASIC Bitcoin miner manufacturer Ebang is applying for a $100 million IPO in the US, as per the form filed with the US Securities and Exchange Commission on April 24, 2020.

In this IPO, Ebang is offering Class A ordinary shares at a value of HK$0.001 (US$ 0.00013) per share. The company intends to list its shares on the New York Stock Exchange (NYSE) under the symbol “EBON”.

One of the leading bitcoin mining manufacturers, Ebang has listed Hong Kong-based AMTD Global Markets Limited and US-based Loop Capital Markets as joint underwriters for its IPO.

2019 was worse than 2018

The company reported a revenue of $319 million in 2018 which declined considerably in 2019 to $109 million. One of the leading ASIC (application-specific integrated circuit) chip designers made 82% of 2019 revenue on designing these chips for bitcoin mining, primarily from selling Ebit E12 Series machines and E10 Series machines.

Both the number of these chips and their average price declined in 2019 vs the previous year. While Ebang sold 415,930 mining chips at an average price of $737 in 2018, last year it sold 289,953 chips at less than half of the rate ($304). Ebang reported,

“The decrease in the Bitcoin price in 2018 and the first quarter of 2019 resulted in a material decrease in our sales volume and in the average selling price of our Bitcoin mining machines. Although the Bitcoin price started to recover in the second quarter of 2019, our operations generally lag behind the increase of Bitcoin price.”

The company had a gross loss of $30.6 million in 2019 compared to the gross profit of $24.4 million in 2018. The net losses meanwhile have been $11.8 million and $41.1 million in 2018 and 2019, respectively.

Bitcoin price and COVID-19 affecting adversely

In its Form F-1, Ebang reported that its operators are majorly dependent on the price of bitcoin, as such “expected to continue to be significantly impacted by the fluctuation of Bitcoin price.”

Bitcoin’s price has a direct impact on the “market demand” of the company’s mining machines, a trend it expects to continue.

The global coronavirus COVID-19 outbreak has also “adversely affected” the price of bitcoin and lower prices “may continue in the near term and adversely affect our business of operations and financial condition.” Ebang said,

“We and our customers have experienced significant business disruptions and suspension of operations due to quarantine measures to contain the spread of the pandemic, which may cause shortage in the supply of raw materials, reduce our production capacity, increase the likelihood of default from our customers and delay our product delivery.”

This could be why the manufacturer is now focused on developing 5 nm ASIC chips and mining machines for non-Bitcoin cryptocurrencies such as Litecoin (LTC) and Monero (XMR).

The US is the way after failed attempts in Hong Kong

This isn’t Enbang’s first attempt to go public. Previously, in June 2018, the company filed for an IPO in Hong Kong and failed the same as Canaan. And just like its China-based rival, Ebang has sharply lowered its fund raising target from $1 billion.

Canaan Creative went public last year and raised $90 million (down from the already cut down targeted amount of $400 million). Since listed on Nasdaq in November, the shares of Canaan (CAN) have taken a beating and are now down by over 50%.

The largest bitcoin mining manufacturer Bitmain also tried the Hong Kong route but failed just like the other two. Last year there were reports that Bitmain is also looking to file for an IPO in the US.

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Author: AnTy

Chinese Maker of Bitcoin Mining Equipment Plans US IPO

Ebang, also known as Ebit Maker, is a manufacturer of hardware used for bitcoin mining equipment and is planning on launching an IPO in the United States, according to a report by News 8BTC.

The report indicates that the company, based in Hangzhou, China, has a 9.2% stake of the worldwide market for bitcoin mining hardware, and is the 3rd biggest producer of bitcoin mining equipment worldwide. Ebang also feels that they now have a better standing in the market and are better prepared to keep up with competitors, Bitmain (Antminer) and Canaan (Avalon) in the country’s bitcoin mining industry.

Ebang had also attempted to go public in Hong Kong  last year, but failed, according to the report. Canaan, the 2nd biggest manufacturer of bitcoin mining rigs, has successfully raised $90 million in an IPO, according to the report.

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Author: Silvia A