Bitmain suffered a loss of $500 million: the end of IPO dream?

The world’s largest maker of cryptocurrency mining equipment Bitmain made a $0.5 billion loss in 2018’s Q3, CoinDesk reports. Citing a source who viewed an update that was filed with the Hong Kong Stock Exchange the publication also reported that Bitmain generated revenues of more than $3 billion during the first three quarters of 2018 with only $200 million being generated in Q3.

The loss is evidence that the crypto bear market has dampened demand for mining rigs, the firm’s major product. It comes at a particularly bad time as Bitmain has been planning an IPO on the Hong Kong Stock Exchange. While it is not a given, these results might now complicate this effort. This is especially so considering that the CEO of HKEX, Charles Li Xiaojia, has previously raised concerns with the cryptocurrency firms. Last month in Davos, Switzerland during the World Economic Forum gathering, Xiaojia questioned the sustainability of Bitmain-like businesses. This was in light of the toll that had been exacted on the cryptocurrency mining sector by ‘crypto winter’.

The restructuring at Bitmain has not been limited to the top echelons though. Over the last couple of months, the mining rig manufacturer has laid off employees at various locations around the world. Last month Bitmain shut down a cryptocurrency mining operation in Texas where it had between 7,000 and 8,000 crypto mining rigs. With all the bad news that Bitmain has been generating the past few months, it remains to be seen whether it will push ahead with the IPO plans in the face of the $0.5 billion loss. And if it does, whether HKEX will allow it.

Bitcoin Mining Giant Bitmain Reveals $500 Million Loss; End of the IPO Dream?, CCN, Feb 19