KEY POINTS

  • Ebang files for IPO at Nasdaq to raise up to $125 million
  • Ebang posted a net loss in Q1 2020
  • The Holding Foreign Companies Accountable Act could pose headwinds

Despite decreasing sales and uncertainty of the crypto markets this year, Chinese mining company Ebang is slated to get listed on Nasdaq June 26, becoming the second mining firm to be listed in the United States.

Chinese news outlet The Block Beats reported that the listing will be accompanied by a ceremony in the evening in Hangzhou, China. There will be a virtual striking of a gong during the ceremony, a Chinese tradition celebrating IPOs.

Cointelegraph reported Ebang is aiming to raise up to $125 million on a sale price of $4.50 to $6.50 on the 19.3 million Class A ordinary shares on offer. A successful IPO will put Ebang’s market value at around $800 million.

Ebang’s sales fell by more than half last year, reflecting the crash in crypto markets. The crypto mining company reported revenue of $109 million in 2019, compared with $319 million in 2018. The firm reported a net loss of $2.5 million in the first quarter of 2020, citing non-recurring local tax rebates. 

Ebang is set to follow Canaan, the first mining firm to go public in the United States. Canaan raised $90 million in an IPO last year. Both Canaan and Ebang have abandoned plans to list in Hong Kong. Bitmain, the largest crypto mining firm, also failed to get listed on the Hong Kong Stock Exchange.

Though recent Chinese IPOs in the United States were well-received, the current political situation between the countries might pose a problem, as Ebang noted in its prospectus. The Holding Foreign Companies Accountable Act sponsored by Sen. John Kennedy (R-LA) and Sen. Chris Hollen (D-MD) would boost oversight on foreign firms. It will require public companies to disclose if they are owned or controlled by a foreign government. Kennedy specifically said the legislation is aimed at China and Chinese firms.

Bloomberg said the bill could lead to Chinese companies not being allowed to list on U.S. exchanges. Ebang conceded that increased regulatory access to audit information could make investors uncertain. “The stock price could be materially and adversely affected.”

Bitcoin Mining Cryptocurrency market downfall has resulted in several miners selling their equipment at significantly low prices as they are facing huge losses. Here, two construction workers inspect the area at the bitcoin mining company Bifarms in Saint Hyacinthe, Quebec, Canada, March 19, 2018. Photo: LARS HAGBERG/AFP/Getty Images