Bitmain has been having some financial difficulties for a while now. Last year, smarttest.wpmudev.host reported that the hardware mining giant suffered a blow after the Bitcoin Cash Fork war and was considering shutting down operations in some regions. According to a recent IPO financial filing by the Beijing-based firm, $500 million was lost in the third quarter of 2018.
In an update of its financial result that was presented to the Hong Kong Stock Exchange for an IPO review, Bitmain earned about $500 million between January and September 2018 on about $3 billion of revenues. Before now, the hardware manufacturer had disclosed that its gross profit for the first quarter of 2018 was about $1 billion. If you substrate the $1 billion from the $500 million earned during the first nine months, you’ll see that the company was left with a $500 loss for the third quarter of the year.
Hong Kong Stock Exchange Reviews Bitmain’s IPO Application
For the first half of 2018, Bitmain reported $2.8 billion in revenue. So, $3 billion in revenue for from January to September leaves the third quarter revenue at $200 million according to CoinDesk. These figures display a significant reversal in fortune from months and years of earning to months of losing.
Keep in mind that Bitmain did not make this report public and has denied losing this much money in the third quarter of 2018. Quoting an anonymous representative of the company, Caijing, the Chinese media outlet, stated:
“The information is incorrect. We will make announcements in time in accordance with the relevant regulations and laws.”
Bitmain’s Cryptocurrency Holdings Drop
According to the financial filing with the Hong Kong Stock Exchange, the cryptocurrency holdings by the mining giant dropped from above $800 million to below $700 million between the beginning and the end of Q3. A decline of over $100 million within a three-month period is significant and is a reflection of the bad condition in the market at the time.
When the IPO application was initially filed in September, Bitmain indicated that it held BTC, BCH, ETH, Dash, and LTC. While it didn’t indicate how much it held of each asset, all these assets have fallen significantly between September 2018 and now with BCH being the biggest loser for obvious reasons. The Bitcoin fork has fallen by more than 70% within this period thanks to the fork war.
According to a source familiar with the matter, Bitmain has to opt for a listing hearing with the HKEx approval before March 26 when the six-month window closes. Only then will the nine-month financial update be made public. Whether or not this will happen is still unclear. However, the chances are slim as the Hong Kong Stock Exchange is hesitant to approve IPO applications from hardware manufacturers like Bitmain because of issues related to profit sustainability and market uncertainty.
Do you think Bitmain suffered the $500 million loss in the third quarter of 2018 or is this a rumor as stated by the company’s representative? If it did, do you think the Hong Kong Stock Exchange will be willing to approve the hardware manufacturer’s IPO application even with this loss? Share your thoughts in the comment section.