China-based Ebang International, one of the leading manufacturers of Bitcoin mining equipment is seeking to list its shares publicly on a US stock exchange market.
According to an F1-form filed with the SEC on Friday, the company is looking to IPO in the US and hopes to raise $100 million. According to the filing, the company is willing to publicly float its Class A ordinary shares at the price of US$ 0.00013 per share with the shares being listed either on the NYSE platform or the NASDAQ Global Markets with the ticker symbol “EBON.”
This is the second attempt by the Chinese company to list its shares, the first being in its home country in Hong Kong back in June 2018. At the time, the company was seeking $1 billion from its IPO, however, its attempt did not go through. Coincidentally, several other companies’ IPOs such as Canaan and Bitmain, the leading manufacturer of Bitcoin mining chips also fell through as the market was deeply into a major correction.
Ebang has had a particularly challenging year in 2019 which could explain the revision of the IPO value by 90%. According to the SEC filing, the company’s revenues fell more than 65% between 2018 and 2019 from $319 million to $109 million. The company also reports a gross loss of $30.6 million last year as compared to a gross profit of $24.4 million in 2018.
The fallen revenue figures are as a result of reduced sales in 2019. Last year, Ebang sold 289,953 mining chips at the prices of $304 as compared to 415,930 chips retailing for $737 in 2018. A bulk of the 2019 revenue figures came from the sales of the Ebit E12 Series chips (53%) and Ebit E10 Series chips (34%.)
“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,” the company mentioned in its SEC filing. “Although the Bitcoin price started to recover in the second quarter of 2019, our operations generally lag behind the increase of Bitcoin price, and we recorded a revenue of US$109.1 million in 2019.”
Ebang reckons that the price, as well as the sales figures of its mining chips, are largely affected by the price of Bitcoin. This means that the revenues closely track the price action of the flagship cryptocurrency.
“The price of Bitcoin tends to have a direct impact on the market demand for our Bitcoin mining machines, in terms of both the price and the quantity, and we expect this trend to continue.”
Ebang’s competitor Canaan Creative successfully filed for a US IPO last year and listed its shares for trading on the NASDAQ market for $90 million which was far shy of its initial quotation figure of $400 million. Since its IPO in November, however, the price of Canaan shares has fallen more than 50% showing an unfavorable market condition at the moment for launching another IPO.
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