Bitmain Technologies Files IPO with the Stock Exchange of Hong Kong (SEHK)

Omar Faridi
  • Bitmain Technologies has filed an application for its IPO with the Stock Exchange of Hong Kong (SEHK).
  • Bitmain has released a detailed prospectus which shares the firm's profit and loss statements from FY 2016, 2017, and first half of 2018.

Beijing-based Bitmain Technologies has reportedly filed an application to launch its highly-anticipated Initial Public Offering (IPO) on the Stock Exchange of Hong Kong Limited (SEHK) - one of the largest in Asia, with a market capitalization of approximately $4 trillion.

Released this week, Bitmain’s IPO prospectus does not specify the number of shares it will offer nor include a schedule (or timeline) for the public offer. However, the prospectus does reveal the mining hardware manufacturer’s profit and revenue for financial year (FY) 2016, 2017, and first half of 2018.

Bitmain's Profit & Revenue Statements

The financial figures are as follows:

Revenue:

  • $2,845,467,000 (as of June 30, 2018)
  • $2,517,719,000 (in FY 2017)
  • $277,612,000 (in FY 2016)

Profit:

  • $907,792,000 (almost $1 billion Q1/Q2 2018)
  • $1,212,750,000 (in FY 2017)
  • $151,351,000 (in FY 2016)

Commenting on its “strengths”, Bitmain noted in its prospectus (in which much of the information has been redacted) that there are six factors which “differentiate” the leading crypto mining equipment manufacturer from its competitors. They include:

  • “Leader in the global ASIC industry;”
  • “Pioneer in the thriving blockchain ecosystem;”
  • “Strong contender in the AI chip industry;”
  • “Outstanding research and development capabilities;”
  • “Close partnership with leading supply chain partners;” and
  • “Visionary management team believing in AI and blockchain technology.”

In line with these core strength areas, Bitmain Technologies plans to further invest in its ongoing research and development (R&D) efforts, “advance [its] presence” in the crypto industry, and focus on the “commercial application” of AI technologies.

IPO Underwriters

Underwriting Bitmain’s IPO are Hong Kong Securities Limited, Commerce and Finance Law Offices, KPMG, China International Capital Corporation, Hong Kong-based Maples and Calder, and Frost & Sullivan.

The prospectus clarifies: 

As of the Latest Practicable Date, none of the experts named above has any shareholding in any member of our Group or the right (whether legally enfroceable[sic] or not) to subscribe for, or to nominate persons to subscribe for securities ... in any member of our Group.

Bitmain IPO Prospectus

Information pertaining to Bitmain’s investments was included in the prospectus. Notably, Bitmain Technologies recently acquired a 3 percent stake in Opera through a $50 million investment in Opera Limited.

Binance CEO Sues VC Firm Sequoia for Reputational Damages

Francisco Memoria

Changpeng Zhao, the CEO of leading cryptocurrency exchange binance, has reportedly sued well-reputed venture capital firm Sequoia over reputational damages allegedly caused by a lawsuit the VC firm filed against Binance that was dismissed.

According to a filing submitted to the High Court in Hong Kong that was obtained by CoinDesk, Changpeng Zhao, referred to as CZ, claims Sequoia Capital China, a unit of Sequoia, significantly damaged his reputation and is looking for compensation.

This, according to the CEO, prevented him from raising money at a proper valuation for Binance. Sequoia reportedly damaged his reputation through a lawsuit filed in April of last year over a funding deal that went awry.

A hearing for the case is set to take place on June 25 between CZ and SCC Venture VI, a special purpose vehicle of Sequoia Capital China. An inquiry to determine whether Zhao “sustained any and what damages” is being demanded, over an injunction order Sequoia obtained in late 2017 that reportedly prevented CZ from raising funds in March of 2018.

Sequoia’s initial lawsuit was dismissed by the Hong Kong High Court, with the VC firm having to repay Binance the legal fees required for its legal representative.

In the filing, the CEO of Binance stated:

The injunction order has caused loss to me for which I am entitled to reasonable compensation by Sequoia. In particular, I have suffered i) a loss of chance to raise capital through successive rounds of financing at increasing high valuations; and ii) damage to my reputation.

Sequoia is notably seen as one of the most well-reputed venture capital firms focusing on tech startups, and available data shows it operates 22 funds across the globe and raised $15.3 billion so far.

Meanwhile, Binance has been going through a rough few weeks. The exchange was hacked for 7,000 BTC earlier this month, and considered rolling back the Bitcoin blockchain to recover the stolen funds, a move that saw him be heavily criticized on social media.

Binance recently published an extensive blog post recapping the incident that detailed hackers managed to control a number of Binance user accounts and structured large withdrawals from these. More recently, various users complained they lost funds after experiencing lag on the trading platform.