According to a by 8BTC published on January 24, 2019, an “inconsistent” business model might be to blame for cryptocurrency mining giant Bitmain’s diminishing chances of being listed on the Hong Kong Stock Exchange ().
“Consistent” Business Models the Need of the Hour
Speaking on the sidelines of the World Economic Forum in Davos, Charles Li Xiaojia, the CEO of Hong Kong Exchanges and Clearing () asked companies looking to go public in HK to show some “consistency in their business models.”
Xiaojia’s above statement was in response to a question raised by journalists regarding the status of IPO applications from digital currency mining firms like Bitmain, Canaan, and Ebang International Holdings.
Xiaojia :
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“If a company made billions of US dollars through Business A, but suddenly said it will do Business B without showing any performance, or said Business B is better, then I don’t think the Business A featured in their application will be sustainable.”
However, he ensured that the HK Exchange will provide “procedural justice” to the applicants and that all three companies will have a right to appeal.
Mixed 2018 for Bitmain
Following the monumental crypto boom in late 2017, Chinese firm Bitmain emerged as the largest player in the crypto mining business. The company a colossal turnover of $2.3 billion, which could largely be attributed to their famous mining equipment ASIC S9 Miner being sold in the markets like hotcakes.
However, things haven’t been as hunky-dory for Bitmain of late. The crash in the crypto market has vastly reduced the demand for mining equipment in the industry, which is reflected in the company’s recent financial reports. Unsurprisingly, the dry market spell has put the firm’s ambitious IPO plans in great jeopardy.
On September 26, 2018, emerged regarding Bitmain’s plans to go public in Hong Kong. The company coming fresh off in revenue in the first half of 2018, looked poised to launch its IPO without any hassle. Unfortunately, things took a downturn for Bitmain towards the end of 2018.
On December 21, 2018, the Hong Kong Exchange (HKEX) that it would not give the green-light to Bitmain for their upcoming IPO, citing the premature and unregulated nature of the cryptocurrency industry.
Financial Crunch Bites Bitmain
Lack of funds and dipping profits have caught Bitmain off-guard, forcing the firm to abandon many of its business operations and units.
BTCManager on December 27, 2018, how Bitmain axed close to 50 percent of their staff. Further, the company has also work in Texas, USA, where it was supposed to build the largest mining operation in the country.
Published at Fri, 25 Jan 2019 17:00:39 +0000
