Mining Giant Bitmain Posts $500 Million Loss in IPO Financial Filing

Mining hardware giant Bitmain lost about $500 million in the third quarter of 2018 amid an overall bearish market for cryptocurrency, CoinDesk has learned.

The Beijing-based company recently provided an update on its financial results to the Hong Kong Stock Exchange (HKEx), which is reviewing Bitmain’s application for an initial public offering (IPO) first filed in September.

The update showed Bitmain earned around $500 million in the first nine months of last year, on slightly over $3 billion of revenues, according to a source familiar with the situation. The filing, which is not public, does not break down the results by quarter.

However, Bitmain previously disclosed it had grossed profits of $1 billion in the first half of 2018. Subtracting that from a $500 million profit for the first nine months leaves it with a net loss of roughly $500 million for the third quarter.

The company had also previously reported $2.8 billion of revenues for the first half, so the $3 billion figure for the first nine months works out to third-quarter revenues of just about $200 million.

(Bitmain only needs to provide the nine-month figures at this stage under HKEx rules, which say that listing applicants can be no more than six months behind on reporting.)

These are the first precise figures to show the company’s reversal of fortune following the significant growth in revenues and profits over the past several years documented in the IPO application filed in late September.

Bitmain declined to comment for this article, citing its pending IPO application.

However, Bitmain had already signaled it had fallen on harder times with layoffs and office closures around the world beginning at the end of the last year that affected almost every unit of the company. Its main businesses are manufacturing mining equipment and operating mining farms and pools – activities that have broadly suffered from the slump in crypto prices.

Hit to portfolio

Further, the update provided to HKEx showed Bitmain’s crypto holdings dropped in value from more than $800 million as of June 30 to less than $700 million at the end of the third quarter, the source said. This decline of more than $100 million over three months reflected the overall drop in market prices over that period.

The company’s IPO application, filed in late September, indicated that Bitmain mainly held bitcoin, bitcoin cash, ethereum, litecoin and dash, although it did not provide a breakdown of how much it held of each asset.

Since Sept. 30, all of the cryptos mentioned in that filing declined by more than 50 percent, according to CoinMarketCap.

In particular, the price of bitcoin cash, which forked off the original bitcoin network in 2017 with Bitmain’s support, declined by over 70 percent.

The nine-month financial update will not be revealed to the public unless Bitmain can proceed to a listing hearing with approvals from the HKEx before the six-month window closes on Mar. 26, the source said.

And it remains an open question whether that will happen, since, as previously reported, the HKEx is hesitant to approve applications from cryptocurrency mining equipment makers due to uncertainties about the sustainability of their profits.

Bitmain c0-founder Jihan Wu image from CoinDesk archives.

Published at Tue, 19 Feb 2019 04:10:48 +0000

June 27, 2017

Decentralized Ad Platform Developer AdEx Announces Token Sale

In an official blog post published today, decentralized ad exchange platform AdEx has announced that it will be holding a token sale, which is scheduled to begin June 30th, 2017. The project seeks to raise 40 000 ETH over the course of the crowdsale.

About the AdEx Project

Current advertising networks like Google AdSense, Adsterra, ShareASale, and others are fraught with problems, not the least of which are ad fraud and lack of consumer privacy.

AdEx aims to change all of that by developing a decentralized blockchain-based ad exchange that will benefit all parties – advertisers, publishers, and consumers – while bringing data security, fraud protection, clear and accurate reporting, and numerous other advantages of blockchain technology to the online ad market.

Co-founder and CEO of AdEx Ivo Georgiev explains:

The solution offered by AdEx seeks to benefit all parties involved in the online advertising ecosystem, which means end users as well as advertisers and publishers, while removing unnecessary and downright risky elements currently associated with centralized infrastructure.

Once launched, the AdEx Network will enable transparency for advertisers, better ad serving control for publishers, and more control over privacy and ad preferences for consumers.

The Technology Behind the AdEx Platform

Developed on the Ethereum blockchain, one of the core strengths of the AdEx platform will be its use of smart contracts. A smart contract is a piece of software, executed on the Ethereum blockchain, that contains all of the terms, rules, and regulations for negotiating the terms of a contract. It automatically verifies the contract and then executes the agreed upon terms.

In the case of AdEx, these smart contracts will ensure the removal of third party intermediaries and ensure complete transparency of the entire system, from ad selection and tracking to bidding and payment. The complexities of choosing and tracking ads and facilitating bidding and payment will be defined in these smart contracts, simplifying and securing the entire process.

To mitigate the high costs associated with storage on the blockchain, AdEx will be utilizing IPFS (InterPlanetary File System) to host advertising related media such as images, videos, and larger data. Developed in 2014 by Protocol Labs, IPFS is described as a peer-to-peer hypermedia distribution protocol that allows for fast, secure storage and retrieval of data.

The AdEx team is also working on prototypes that incorporate several second layer solutions that will operate on top of Ethereum. These solutions will enable advertisers and publishers to easily interact while avoiding any potential blockchain limitations regarding speed and transaction fees. AdEx plans to implement IOTA as a future second layer to further improve the platform’s scalability.

Because AdEx is designed to be compatible with most of the existing ad tech industry, the process of adoption and integration by publishers and advertisers is easy. AdEx can be used in websites, mobile and desktop applications, and even embedded devices.

ADX Tokens and the Token Sale

The crowdsale, which begins on June 30, 2017, and runs through July 30, 2017, will fund the initial development and adoption of the AdEx advertising network. AdEx tokens (ADX) will use ERC20, a standard protocol for smart contract systems powered by native tokens. This will ensure the platform’s compatibility with other Ethereum-powered solutions.

In order to estimate and optimize the perfect supply of native tokens for the token sale, AdEx has partnered with WINGS Foundation, the developer of WINGS DAO. The project also engages the social graph of the WINGS DAO crypto-experts to maximize potential project backers who can serve as product champions and evangelists, allowing AdEx to quickly go to market.

The terms of the ADX token sale are as follows:

Crowdsale duration: 1 month
Start date: June 30, 2017
End date: July 30, 2017
Total number of ADX tokens: 100,000,000
Number of ADX tokens available for sale: 80,000,000
Currencies accepted: ETH
Token price: 1 ETH = 900 ADX
Campaign cap: 40,000 ETH

Over the course of the token crowdsale, 80% of all ADX tokens will be available for distribution among the supporters. Of the remaining twenty percent, 16% will be reserved for developers and advisors, which will be vested for a year to ensure the smooth development of the platform. The remaining 4% will be distributed between WINGS DAO community and the bounty campaign participants, as shown in the picture below.

During the campaign, only ETH transactions will be accepted. The address for contributions will be published at tokens.adex.network once the token sale has begun.

Future Plans

The first AdEx advertising platform prototype is scheduled for release as early as February 2018. It will include basic core features such as an ad bidding system, a front-end for advertisers publishers, and an SDK for publishers. The prototype will primarily focus on native and display advertising.

To ensure transparency, the prototype will undergo a stringent audit by an independent third party prior to release and its code will be completely open-source.

In the year following the successful release of its prototype, AdEx will focus heavily on business development as determined by both market needs and community feedback. During this time, AdEx plans to roll out major improvements to the platform, including user targeting and reporting, full integration of SDK, and video advertising.

By January 2019, AdEx plans to release AdEx v.2, which seeks to accommodate the needs of the increasing number of publishers and advertisers using the platform. The v.2 solution will essentially be a complete technological revamp, scaling the entire solution upward and possibly extending to other blockchains such as Aeternity or RSK.

Do you think the AdEx advertising platform will adequately address the shortcomings and failures of the current online advertising industry? What do you think is the most exciting aspect of this project? Let us know in the comments below.

Images courtesy of AdEx, AdobeStock

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