Bitmain Releases First Public Financial Disclosures
On September 26th, mining firm Bitmain publicly disclosed its financial information for the first time. The move comes in anticipation of an IPO on the Hong Kong Stock Exchange.
Bitmain, the Chinese giant of crypto mining, has publicly released its financial standings in a prospectus report on Wednesday. The report covers the company’s finances up to June of 2018, while solidifying the companies prospective ICO.
Numbers Seeing the Light of Day
CNBC notes that the release of Bitmain’s financial statement arrives after a KPMG audit. As the price of Bitcoin and other cryptocurrencies remains bearish, investors are eager to for insight into Bitmain’s stability. The document itself can be found here.
While Bitmain raked $742.7 million during the 2018’s first half, BitMEX notes that:
The new filling confirms our suspicion that Bitmain has been making large losses recently, with a net loss of US$395m in Q2 2018. The magnitude of wasted production costs is also revealed, with almost US$0.5 billion spent on failed chips in the last 18 months.
BitMEX writes that, on the other hand, “[…] the document also confirms that Bitmain successfully raised US$442m from investors in August 2018, significantly strengthening the balance sheet.”
Observers like Katherine Wu were keen to pick out some other noteworthy numbers like total revenue, as well as the amount of revenue generated by the sale of mining gear:
Just had the chance to skim the (400+ page) Bitmain IPO document. Some interesting stats:
+ In the first half of 2018, Bitmain’s revenue was $2.845 billion, with a net profit of $1.123 billion. 95% of revenue comes from the sale of 2.56 million (!!) mining rigs.
More below ⬇️ pic.twitter.com/8UyKHJOvfk
— Katherine Wu (@katherineykwu) September 26, 2018
The report also reveals roughly 40 previously-unknown Bitmain investors. This group consists mainly of firms from China. However, CNBC notes investments from “Sequoia Capital, CAS Investment Management and Philippe Laffont’s tech-focused Coatue Management.”
Despite the disclosure, the details of the IPO itself remain fuzzy. The report lists neither a projected schedule nor any indication as to the number of expected shares.
One particularly revealing section of the report notes damages accrued through a number of risks Bitmain fell victim to. These risks involve the cost of production, as well as lowered prices due to a bloated inventory. BitMEX maintains that these risks are in fact vital to the companies standing in the mining word:
If Bitmain didn’t take such risks the company would not have built $1,617m of shareholder equity in the last few years and Bitmain would not have been the largest and most profitable mining company in 2017.
Earlier this month Bitcoinist reported on Bitmain’s release of a new ASIC chip released in hopes of quelling rumors, mistrust, and pessimism surrounding the upcoming IPO.
What are your thoughts on Bitmain’s disclosure, as well as their IPO ambitions? Tell us in the comments below!
Images courtesy of Bitmain, Shutterstock, Twitter /@katherineykwu.