Bitmain Lost 600 Million in Q2, Incredibly Risky for Its IPO Investors
Bitmian, the world’s dominant cryptocurrency mining chip producer, is filling for an initial public offering (IPO) potentially at $18 billion on this September with a market capitalization of $40 to $50 billion. If all goes well, it will be the largest IPO in the world, as thus, people are more concerned about the company’s financial condition.
Some cryptocurrency marketing commentators express their concern about Bitmain. Samson Mow, CSO of Blockstream indicated that Bitmian’ s Q2 revenue was a ‘disaster’ in a tweet. He pointed out that Bitmian is raising capital in a rapid speed, however, the firm is only showing its Q1 financial results to its pre-IPO investors while we are well into Q3.
Samson believes that Bitmain lost $600-700 million in Q2 due to a massive $1.24 billion USD in inventory. While the next generation miners has been rolled out by its rivals, like Avalon’s 7nm 30T miner, Bitmain AntMiner S9’s price has dropped by 85% from highs at $4,400 to $536.
It is worth pondering that, Why we haven’t seen a new Antminer in a while in such a competitive market. According to some informed sources, Bitmain is eager to release a new version of its ASIC as the competition was closing in to keep their competitive edge over the crypto hardware market. However, Bitmain’s risk wafer on 16nm/12nm/10nm all failed and lost around 4 billion yuan (US$581.5 million).
Anther big issue embarrasses Bitmain is its BCH holdings on market. According to its financial statement, as of December 2017, Bitmain held about 841.8k BCH and 36.8k BTC, however, three months later, their BCH holdings ballooned to over 1 million BCH.
Bitmain sold most of their bitcoin for Bcash. As bitcoin core developers disclosed the Bcash vulnerability, BTC price dropped a lot which also leaded to a significant loss in Bitmain’s balance sheets.
By launching an IPO, Bitmain has attempted to try and start divesting their BCH holdings and realize profits on those coins. With the raising fund, the firm may continued creating their next gen SHA256 ASIC.
However, except for those strong BCH believers, most crypto investors has no appetite about holding. As thus, Bitmain is holding a huge cache of BCH that has no liquid markets and no OTC demand.
Unless a bull market coming in the lead up to Bitmain’s ICO, it will be incredibly risk for any investors to buy into.