On the heels of yesterday’s news that competitor Canaan has filed an IPO prospectus to go public on the Nasdaq comes a report that Bitmain, the world’s largest manufacturer of cryptocurrency mining hardware, is also seeking to go public on a New York Stock Exchange.
The application is being sponsored by Deutsche Bank, Tencent News reports.
Bitmain, Canaan and Ebang, Chinese companies that together dominate the manufacture of high-performance cryptominers, had all applied previously for the right to conduct an IPO in Hong Kong.
All three company’s applications were either rejected or lapsed after Hong Kong regulators’ expressed concern that early-stage super profitability in crypto had been eclipsed by a persistent and perhaps permanent market downturn affecting the entire mined cryptocurrency space.
Bitmain promised Hong Kong securities regulators that it intended to move operations off of an almost exclusive historical focus on cryptomining and onto AI and supercomputing. Regulators were unconvinced of the company’s track record in those areas, however, and noted that forthcoming regulation of cryptocurrencies would likely cut into company profits.
In its latest report, Tencent News quoted a January 2019 conversation it had at the World Economic Forum in Davos with Li Xiaojia, president of the Hong Kong Stock Exchange regarding Bitmain’s bid for a Hong Kong IPO:
“For the IPO, the core principle of the HKEx is marketability (suitability). Is the business model introduced by the listed company to investors suitable for listing? For example, in the past, it has earned billions of dollars through the A business, but suddenly said that it will do B business in the future, but there is no performance. The model is better, then I feel that the A business model that you brought to the market has not been sustainable. There is no supervision before, and then the supervision is started, then you can still do this business, can you make this money?”
The outlet also quoted a remark an individual called Tension made on a Chinese social media site suggesting that crypto may never recover territory it lost in the crypto crash of the past few years:
“The blockchain industry itself is not easy and controversial. There are scammers and idealists, geeks and speculators. Surviving and advancing in the cracks, only one bit of land has emerged in five years, and in the next ten years, There may not be a second one.”
Tencent expects that Bitmain’s IPO application will undergo,”three rounds of inquiries…and other procedures,” and could take between one and two months to complete.
Bitmain has reportedly enlisted the help of Zheng Hua, a former representative of Nasdaq in China, as a consultant to the undertaking.