Bitcoin mining gear maker files for a $100 million IPO in the US

One of the world’s largest Bitcoin mining gear makers, Ebang International, just announced its US-based IPO. The company officially filed for an Initial Public Offering in the United States, revealing that its plan is to raise up to $100 million.

Ebang to hold an IPO after difficulties in 2019

The F-1 form that the firm filed with the US SEC this Friday shows that Ebang wants to offload some Class A ordinary shares. The face value per share seems to be HK$0.001, which is US$0.0013 per each share.

While the company is looking to hold its IPO in the US, this is actually a China-based firm. Furthermore, its goal is to get its shares either on Nasdaq Global Market, or the NYSE (New York Stock Exchange). The form also revealed the desired share symbol — EBON.

As mentioned, the company is a leader when it comes to ASIC designing. In fact, over 80% of its 2019 revenue came from designing and selling Bitcoin mining chips.

It should also be noted that the company’s revenue dropped to only one-third of the revenue seen in 2018. Back then, it earned $319 million, but in 2019, that amount dropped to only $109 million. Meanwhile, the gross loss in 2018 was $24.4m, while in 2019, it increased to $30.6m.

At the same time, both the number of sold chips and their price delined in 2019, when compared to 2018. The average price per chip in 2018 was $737, and the firm sold 415,930 of them. In 2019, however, the price was less than half — $304 per chip, and it sold only 289,953 pieces.

What happened after successful 2018?

Ebang explained this by saying that “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, and we recorded a revenue of US$109.1 million in 2019.”

Now, with coronavirus pandemic striking in 2020, the lower prices of chips will likely remain, at least for a time. The pandemic and quarantine already led to disruptions and suspensions of operations. The company also saw a shortage of raw materials and production capacity reduction, which will only affect it further.