Summary

Bitcoin miner manufacturer Ebang files for $100 million IPO

Major Bitcoin miner manufacturer Ebang files for $100 million initial-public-offering (IPO) in the United States.

This is Ebang’s second attempt at an IPO. In June 2018, shortly after Bitcoin bull run, the mining giant was looking to raise as much as $1 billion. However, Ebang never went through with the process until now.

Furthermore, Ebang competitor Canann Creative was listed last year, raising $90 million of its $400 million target. Since launching at an IPO price of $9, the stock now trades just north of $4, a decline of over 50%.

IPO Filing

Per the filing, the company is seeking to raise $100,000,000 via Class A ordinary shares at an initial value of $0.00013 per share.

The firm intends to list on the New York Stock Exchange (NYSE) or Nasdaq Global Market (Nasdaq), under the trading symbol “EBON”.

AMTD Global Markets Limited and Loop Capital Markets LLC are listed as the underwriters for Ebang’s IPO filing. AMTD Global Markets has successfully completed over 36 equity offerings with a combined transaction value of $20 billion.

Financial Statements

With a net revenue of $109 million, Ebang’s 2019 revenue declined 192% from to subsequent year. As a result, Ebang’s losses have begun to pile, posting a net loss of -$42 million for the 2019 fiscal year.

Business Model

Ebang’s primary business relies on designing and manufacturing ASIC miners.

Bitcoin mining equipment accounted for approximately 81% of the company’s revenue in 2019, while miner hosting services only accounting for about 14%.

Furthermore, 87% of the company’s revenue originated in China. This is attributable to many massive cryptocurrency mining farms operating from within China.

The majority of the company’s mining sales stem from the sale of the Ebit E12 Bitcoin miner.

…US$1.4 billion in 2019 and are expected to further increase at a CAGR of 24.8% to approximately US$4.3 billion in 2024, according to the F&S report. F-1 Form (Page 2)

Despite declining Bitcoin prices, projections show that Bitcoin hardware sales will continue to accelerate. This will prove to be a boon for Ebang as the majority of its business relies on designing and manufacturing Bitcoin mining chips.

The company plans to diversify its lineup by developing “proprietary 5 nm ASIC chips and mining machines for non-Bitcoin cryptocurrencies such as Litecoin and Monero.” However, most altcoins are still correlated with Bitcoin price, so Ebang will have to rely on Bitcoin rising in value or change its business model to become profitable.

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