FT Says Bitmain Posted Different IPO Prospectus’ Profits Compared To Earlier Reports

Bitmain, the largest cryptocurrency mining company in the market has gained attention during the last months after showing interest in receiving funds from the traditional financial market. According to a report from the Financial Times, Bitmain posted information about its profits that was not in line with what the company informed investors in previous documents.

Bitmain’s IPO prospectus showed that in 2017 the company registered $701 million dollars in profits. However, before the pre-IPO funding round, Bitmain mentioned that it had $1.1 billion dollars profit.

Bitmain has applied for an initial public offering on the Hong Kong Stock Exchange (HKEX) back in September this year. The intention was to raise $18 billion dollars. According to FT, the company said that the IPO prospectus contains the appropriate figures for its profits.

The company and the auditors failed to explain how these discrepancies appeared in the pre-IPO report. Investors do have mixed opinions regarding this situation.

About it, a China-based investor commented:

“The differing figures show that management doesn’t know how to communicate with the capital markets. It just shows that they are not sophisticated enough and maybe too aggressive.”

Another investor explained that Bitmain’s business is just speculative as the whole cryptocurrency market and that the machines Bitmain sells do not create real value.

The company has also registered an important number of digital assets stored in its accounts. As per the report, Bitmain has around 28% of its assets allocated in virtual currencies. The company’s products can be purchased using virtual currencies, something that can explain why they have a significant share of the market.

Bitmain stated that it holds Bitcoin (BTC), Bitcoin Cash (BCH) and Ethereum (ETH) that are worth $886.9 million dollars. Nevertheless, some individuals and experts believe that these estimates are just over-optimistic.

This shows that Bitmain is not generating certainty in investors and is creating doubts around its real figures.

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