Bitcoin miner maker Ebang selects Nasdaq for its IPO, in which it plans to raise more than $100 million

Quick Take

  • Bitcoin miner maker Ebang has chosen Nasdaq to list its IPO shares 
  • The company plans to raise $106 million at a share price range of $4.50 to $6.50

Ebang International, one of the largest bitcoin mining machine makers, has disclosed more details of its initial public offering (IPO) in the U.S.

The China-based company filed a revised prospectus with the Securities and Exchange Commission (SEC) on Wednesday, saying that it has selected Nasdaq Global Market to list its shares, under the symbol “EBON.”

Ebang also disclosed pricing details of the IPO. It plans to raise $106 million by offering 19.32 million shares at a price range of $4.50 to $6.50.

Further, the company has onboarded an additional underwriter. Prime Number Capital will join its two existing underwriters: Hong Kong-based AMTD Global Markets Limited and U.S.-based Loop Capital Markets.

Ebang initially filed its IPO prospectus in April, but did not disclose specific details at the time. Wednesday’s revised prospectus also listed some additional risk factors related to increased regulatory scrutiny of Chinese firms in the U.S.

“On May 20, 2020, the U.S. Senate passed the Holding Foreign Companies Accountable Act, or the Kennedy Bill. [...] Enactment of the Kennedy Bill or any other similar legislations or efforts to increase U.S. regulatory access to audit information could cause investor uncertainty for affected issuers, including us, and the stock price could be materially and adversely affected,” said Ebang.

Ebang also called its financial situation and bitcoin’s volatile price as risk factors. “Our results of operations have been and are expected to continue to be significantly impacted by the fluctuation of Bitcoin price, and in particular, significantly and negatively impacted by the sharp Bitcoin price decrease,” the company said.

As for its financial situation, Ebang said it had suffered losses and negative cash flows from operating activities in the past and may not achieve or sustain profitability in the future. The company had net losses of $11.8 million and $41.1 million in 2018 and 2019, respectively.

In Q1 2020, Ebang's net loss increased significantly to $2.5 million, according to the company's "estimated preliminary unaudited” financial results. In Q1 2019, that figure was $0.6 million. Ebang said the loss increased mainly because of a "significant decrease in certain non-recurring local government’s tax rebates."

The company's revenues increased slightly to $6.4 million in Q1 2020 as compared to $6.4 million in Q1 2019, primarily due to an increase in average selling price and sales volumes of its Ebit mining machines.

This is Ebang's second attempt to go public. In June 2018, the company filed for an IPO in Hong Kong, but the listing never materialized. At the time, the company was reportedly looking to raise as much as $1 billion.

Ebang’s U.S. IPO would make it a second bitcoin miner maker listed on Nasdaq. Last year, the stock exchange listed Ebang's rival Canaan Creative, which raised $90 million via its offering. Canaan's shares, however, are down by over 75% since its listing.

Last year, there were reports that Bitmain has also filed an IPO in the U.S. with Deutsche Bank as the sponsor. A Deutsche Bank spokesperson declined to comment to The Block at the time.

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