Ebang International IPO Prices Below Midpoint of Expectations
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The Hangzhou, China, maker of bitcoin-mining equipment last week had said it expected the IPO to price at between $4.50 and $6.50 a share, with a midpoint of $5.50.
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Ebang International Holdings (EBON Ticker on NASDAQ) has priced its initial public offering of 19,264,337 Class A ordinary shares at $5.23/share, for a total offering size of ~$100.75M.
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Ebang said it expects total proceeds of about $100.8 million from the offering, adding that it granted the underwriters an option to buy an additional 2.89 million shares.
To sum-up, they managed to get $100mn but they were aiming for $125mn, therefore if we are honest, it shows that investors are not valuing Bitcoin miners at a very good valuation.
Ebang Stock Price
At the time of writing the stocks is down more than 10% vs its listed price
This could be for a few different reasons:
- Failing to understand the entire ecosystem/industry around Bitcoin & mining
- Lack of trust in Chinese based miners
- Failing to see competitive advantages of one miner compared to another (I do too to be honest except scale)
- Bitcoin volatility deemed too high for traditional investors
- Bitcoin still seen as an illegal used currency
- Environmental issues raised by Bitcoin Mining
What does Ebang intend to do with the proceeds?
The company is raising >$100mn and has big plans for the future:
1. Setting up a Cryptocurrency exchange
2. Opening other mining facilities (especially through mining pools)
“We will soon establish our own mining farms with [a] flexible cooperation model [...] as well as mining pools to sell our computing power and we will also start to set up [a] cryptocurrencies trading exchange.”
They also intend to explore application of blockchain to financial services and education.
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