Chinese ASIC mining hardware manufacturer Ebang ($EBON) began publicly trading on the Nasdaq Global Market on June 26, releasing 19.3 million shares into the market at $5.23 per share. This makes Ebang the second ASIC hardware manufacturer to go public on a U.S. stock exchange.
Ebang’s poor performance
Minutes after Ebang went public, $EBON prices plunged. On June 26, EBON hit a low of $3.96—a 25% decline from its IPO price, and as of press time, $EBON is trading at $4.16–20% below its IPO price.
Ebang went public on a United States stock exchange at a time when U.S. sentiment around Chinese companies is at an all-time low. The Luckin Coffee ($LK) scandal, in which the Chinese coffee company/coffeehouse chain fabricated their 2019 sales by $310 million rubbed a lot of American investors the wrong way. Shortly after the Luckin Coffee scandal unfolded, Nasdaq made it harder for Chinese companies to go public on the exchange.
Will Ebang mimic Canaan?
Canaan ($CAN) was the first ASIC mining hardware manufacturer to go public on a United States stock exchange. At the time of Canaan’s IPO in November, $CAN sold for $8.99 per share. At press time, $CAN is selling for $1.78 per share—80% below its IPO price.
Given that Ebang and Canaan are offering the same service, on the same stock exchange, there’s a strong chance that the performance of Ebang’s stock will mimic the performance of Canaan shares and continue to plunge.
To add insult to injury, global economies are in turmoil due to the impact of coronavirus and the stock market has been relatively volatile over the past few months. In addition, many block reward miners are finding that their operations are no longer profitable now that the block reward across all versions of Bitcoin have halved. Neither of these events are good for both of the publicly traded ASIC hardware manufacturers.
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