Chinas Ebang Seeks To Raise Up To $124m In Nasdaq IPO

Ebang International, a Chinese maker of cryptocurrency mining equipment, has set terms for its initial public offering (IPO) in the United States to raise up to $124 million, according to an updated filing with the U.S. Securities and Exchange Commission (SEC) on Thursday.

The Hangzhou-based company plans to offer 19.32 million shares at a price range of $4.50 to $6.50, which translates into an offering size of $87 million to $124 million. At the midpoint of the proposed range, Ebang could raise $106 million and command a market value of $721 million.

The company, which filed confidentially this February, selected the Nasdaq as its listing location and added Prime Number Capital as an underwriter alongside AMTD Global Markets and Loop Capital Markets, shows the latest filing. Ebang plans to list on the Nasdaq under the symbol “EBON.”

Established in January 2010, Ebang was initially involved in the development and sales of communications network access devices and related equipment before it changed the course in 2014 to develop blockchain computing equipment in wake of the rising popularity of the blockchain industry.

The company primarily designs and manufactures application-specific integrated circuit (ASIC) chips and fabless integrated circuits (IC) for bitcoin mining machines. The business of selling Bitcoin mining machines and related accessories contributed to 82.45 per cent of its $109 million revenue in 2019.

The prospectus indicates that Ebang’s 2019 revenue dropped about 65.83 per cent to $109 million in 2019 from $319 million in 2018, while its net loss more than tripled to reach $41 million.

This was largely due to the decrease in the Bitcoin price in the first quarter of 2019 that resulted in “a material decrease” in the company’s sales volume and in the average selling price of its Bitcoin mining machines.

The company, whose major business is closely correlated with the Bitcoin price, also had a bumpy start in 2020 after a drastic drop in the Bitcoin price this March.

“Many businesses and social activities in China and other countries and regions have been severely disrupted, including those of our suppliers, customers and employees,” said the company. “We expect that our business and results of operations could be materially and adversely affected by the global market panics over the COVID-19 outbreak in the near term.”

This IPO attempt on the Nasdaq represents Ebang’s third bid to float shares on a public market, following its two failed attempts on the Hong Kong Stock Exchange (HKEX) due to officials’ concerns about the “sustainability” of miners’ business models, given the falling price of bitcoin at that time, said sources cited by Reuters.

The China-based cryptocurrency mining equipment maker had initially filed for an IPO in Hong Kong on June 24, 2018, to reportedly raise up to $1 billion.

It renewed the draft IPO prospectus with the board on December 20, 2018, before the first application lapsed. But the company eventually shelved the plan as it saw the second attempt expire on June 21, 2019, six months after it was submitted.