Bitcoin Miner Ebang Files $100mln. IPO with US SEC

Ebang, a popular Bitcoin (BTC) mining hardware manufacturer, has submitted a $100 million initial public offering (IPO) with the US Securities and Exchange Commission (SEC).

Ebang intends to disburse Class A ordinary shares having a face value of $0.00013 a share.

The company intends to get listed on Nasdaq or the New York Stock Exchange, with EBON as ticker.

The initiative has come roughly two years after the company had submitted an application with the regulators to raise $1 billion via IPO in Hong Kong.

Even though the company made its filing in June 2018, the IPO process was terminated by the end of that year.

Last year, Ebang generated 82% of its revenues from its application specific integrated circuit (ASIC) chips and fabless chips for miners.

Ebang’s yearly revenue was $109 million in 2019. Fall in demand for mining hardware in the midst of declining cryptocurrency value has caused a 66% slump in revenue growth from $319 million two years back.

The company also swung into a loss of $30.6 million last year, from a profit of $24.40 million in 2018.

During the same period, Ebang’s chip sales declined from 415,930 (offered at an average price of $737) to 289,953 chips (sold at an average price of $304). Demand for mining hardware has a direct correlation with Bitcoin price volatility, as indicated by Ebang’s filings.

“Market demands and unit price of Bitcoin mining machines correlate with the economic returns of Bitcoin mining machines and are primarily affected by the Bitcoin price. A rise in the Bitcoin price will generally increase the market demand for Bitcoin mining machines, which in turn will allow us to price our products higher, and vice versa.”

Regarding the impact of Bitcoin price on chip sales, Ebang said “The decrease in the Bitcoin price in 2018 and the first quarter of 2019 resulted in a material decrease in our sales volume and in the average selling price of our Bitcoin mining machines.”

“Although the Bitcoin price started to recover in the second quarter of 2019, our operations generally lag behind the increase of Bitcoin price.”

The filing indicates that Ebang has finished creating the model of its proprietary 8 nanometer (nm) and 7 nm ASIC chips, stating that it is prepared to bulk manufacture 8 nm units “when the market conditions become suitable.”

Ebang is also trying to create “proprietary 5 nm ASIC chips and mining machines” for altcoins such as Monero (XMR) and Litecoin (LTC), among others.

The company has pointed out that it aims to start “applying blockchain technology into non-cryptocurrency industries, such as the financial services and healthcare industries.”

Last November, mining manufacturer Canaan Creative amassed $90 million via an IPO, missing its $400 million target by a huge margin.

Since the day of listing on Nasdaq for $9 per share, Canaan’s stock price has declined by more than 50% to change hands at $4.23.