Bitmain Files for IPO in Hong Kong in Big Test of Institutional Investor InterestSep 27, 2018, 9:00AM
Bitmain is the latest in a series of Bitcoin mining firms to go public in Hong Kong, but it is the most profitable producer of this equipment
Bitmain Technologies, the world's largest manufacturer of cryptocurrency mining equipment, has finalized plans for its IPO, selecting Hong Kong as the location for this milestone event. Bitmain's IPO valuation could reach as high as $18 billion. The news follows a string of controversial setbacks that have tested institutional confidence in the cryptocurrency sector.
Bitmain is the latest in a series of Bitcoin mining firms to go public in Hong Kong, but it is the most successful, controlling up to 85% of the total market for the specialized equipment it produces. Bitmain generates most of its revenue by selling high-powered computer chips, known as ASICS, to Bitcoin mining firms. And the company generated net profits of around $742 million for the first six months of 2018 via this core business.
Smaller mining equipment producers like Ebang and Canaan Inc, a Chinese firm controlling 10% of the market, have also filed listing documents for their IPOs on the Hong Kong Stock Exchange. These IPOs are expected to launch later this year or the next.
Bitmain's IPO will feature a dual-class share structure that allows each share held by the company's founders, Zhan Ketuan and Wu Jihan, to exercise 10 votes. According to Bitmain's prospectus, IPO proceeds will be used to invest in research and development as well as to finance an expansion of production output. The prospectus also lists a number of outside companies working on and advising for the IPO. These include China International Capital Corporation, Maples and Kalder in Hong Kong and Hong Kong Securities Limited.
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