Bitcoin mining chip producer Ebang has filed for a $100 million IPO in the United States. The firm is seeking to distribute Class A ordinary shares at face value of $0.00013 per share. Ebang plans to list on either Nasdaq Global Market or the New York Stock Exchange under the ticker EBON. Earlier, the company sought to conduct a $1 billion IPO in Hong Kong. It submitted the filing in June 2018, and the offering had been halted by the end of the year.
Ebang reported a 66% drop in revenues in 2019.
In 2019, 82% of Ebang’s revenues came from its application-specific integrated circuit chips and fabless integrated circuits for miners. The annual revenue for the mining firm was $109 million as compared to $319 million in 2018. Declining demand for mining hardware amid falling crypto prices resulted in a 66% drop in growth for Ebang. The mining manufacturer saw gross profits of $24.4 million in 2018 and $30.6 million in gross losses the next year. Ebang’s chip sales fell from 415,930 at an average price of $737 to 289,953 chips for $304 on average.
The demand for Ebang products depends on the fluctuations in the price of Bitcoin.
According to the IPO filing by Ebang, market demands and unit price of Bitcoin mining machines equate with the economic returns of Bitcoin mining machines and are primarily affected by the BTC price. A rise in the Bitcoin price will generally increase the market demand for Bitcoin mining machines, which in turn will allow the company to price the products higher, and vice versa. The filing further states that the decrease in the price of bitcoin in 2018 and the first quarter of 2019 resulted in a material decrease in the sales volume and the average selling price of the Bitcoin mining machines.
The Bitcoin mining manufacturer also mentioned in its filing that the firm has completed the design for its proprietary 8 nanometers (nm) and 7 nm ASC chips. The filing noted that it is ready to mass-produce the 8 nm units as soon as the market conditions become suitable.