To be or not to be—that is the question. In the case of the Bitmain initial public offering (IPO), it’s looking every day that it isn’t to be. A new revelation uncovered by a Twitter user that follows the company almost religiously has shown that the once mighty cryptocurrency mining equipment manufacturer is teetering more toward crashing into the ground in a thunderous explosion.
BTCKING555 tweeted a few days ago that Bitmain’s losses in the third quarter of the year could have been as much as $740 million. If accurate, it would mark the worst quarter in the company’s history, but continues a slide that Bitmain has been experiencing since before the beginning of March.
The tweet reads, “We got leak of Bitmain Q3 numbers! COMPLETE DISASTER. The company lost $740 Million including losses on inventory and bitcoin cash! And this is not accounting for hash war costs!”
BTCKING555 alludes to possible additional losses that could top $1 billion due to Bitmain having a large investment in Bitcoin BCH. Since the digital currency’s value has been cut by more than half its recent value, Bitmain is out a substantial amount of cash.
Bitmain would have no one to blame but itself if it were to fizzle. In preparation of an IPO that was expected to launch this past September, the company falsely claimed to have received backing by a number of international companies. It also ran up substantial debt with a chip supplier—to the tune of $1 billion. It finally paid just over two-thirds of the debt, but there hasn’t been word on whether it has made good on the outstanding portion.
The company has been accused of using customer equipment for its own mining purposes. It faces a class-action lawsuit in California over the allegations, only adding to the uncertain future of its operations.
The company also presented an IPO prospectus with the Hong Kong Stock Exchange that had blatant errors. The ability of Bitmain to completely disregard regulations and present data that has been verified as false should be enough to make any investor skeptical about giving the company any money. Add this to its mounting financial issues are cringe-worthy and should not only make investors say “No, thanks,” but should make them run away screaming.
New to blockchain? Check out CoinGeek’s Blockchain for Beginners section, the ultimate resource guide to learn more about blockchain technology.