On Sept. 26, 2018, Bitmain filed for an IPO. Things were looking up for the crypto industry giant. Sales of its mining chips made up a majority of the total market, and the company was operating the largest mining pools in the world. At the time, Crypto Fall had yet to give way to Crypto Winter; the price of bitcoin was around $6,500.
But that was six months ago, and a lot can happen in six months. A company can lay off about half of its employees. It can get sued for allegedly stealing customers’ electricity. Its leadership can change hands. And its IPO filing can expire.
Six months, after all, is the exact amount of time it takes for an IPO filing to officially expire with the Hong Kong Stock Exchange, as Dovey Wan, a founding partner of Primitive Ventures—which has investments in Dfinity, Zcash, and Kyber Networks—pointed out on Twitter. After Bitmain filed for its IPO in September, it had months to have a hearing before the Hong Kong Stock Exchange’s listing committee, who could either approve or disapprove the company’s inclusion in the exchange. But that never happened, and now it looks like Bitmain will have to file again if it wants to go public—or not.
What was in Bitmain’s IPO filing?
We took a look at Bitmain’s filing when the company published it back in September. Some of the key takeaways included that the company’s greatest assets were in cryptocurrencies and inventory, the latter being mostly mining hardware. When Bitmain filed its IPO, the company had already ordered more mining hardware than it could sell, given declining cryptocurrency prices. In fact, Bitmain updated its IPO filing last month, disclosing that it had lost about $500 million in the third quarter of 2018.
The company had also been set to launch mining farms in the U.S. and Canada. However, Texas Public Radio reported in January that Bitmain had “suspended its operations” in the small town of Rockdale, where it had previously planned to spend $500 million and offer 400 new jobs.
What else has been going on with Bitmain since September?
In November, more than 100 customers filed a class action lawsuit against the company, alleging that Bitmain mined crypto on their devices before the customers set up the machines to mine for themselves. Bitmain responded by saying that the company “does not mine with customers’ equipment.”
Personnel losses accompanied Bitmain’s financial losses, and the company reportedly laid off a significant number of workers back around December—a time when multiple companies that had banked on crypto’s popularity succumbed to layoffs.
In January, the South China Morning Post reported that Bitmain’s co-CEOs, Jihan Wu and Micree Zhan, would be stepping down from their posts. The company’s product engineering director, Haichao Wang, would take over as CEO while Wu and Zhan would stick around as Bitmain’s co-chairs, according to anonymous sources.
More recently, Coindesk reported that Bitmain has ambitious mining plans for this summer. As electricity costs are expected to decrease in China, Bitmain has arranged for the deployment of 200,000 mining units across the southwestern part of the country, according to unnamed sources. This seems like a potentially big boost for Bitmain, but its own mining pools have been a relatively insignificant source of revenue for the company—making up just 3.3 percent of its total revenue in Q1 2018.
What will Bitmain do about its IPO now?
“We will restart the listing application work at an appropriate time in the future,” Bitmain PR representative Nishant Sharma wrote to BREAKERMAG. Sharma also said that more information about the company’s IPO plans would be available shortly.