Ebang may raise up to USD 144mn in Nasdaq IPO

Ebang International Holdings is pushing ahead with an initial public offering (IPO) in the US that could fetch as much as USD 144.44 million. The Cayman Islands-incorporated, China-based application-specific integrated circuit (ASIC) chip design company filed confidentially in February and officially unveiled its plans to list on Nasdaq in April. It is selling 19.32 million class A stock at USD 4.50 to USD 6.50 apiece to raise between USD 86.94 million and USD 125.60 million. Underwriters AMTD, Loop Capital Markets and Prime Number Capital have a 30-day overallotment option for a further 2.90 million shares. Market interest in developing blockchain technology has been growing in recent years. As of 31st December 2019, there were 5,035 cryptocurrencies in circulation with a total aggregate capitalisation of USD 193.40 billion, compared to USD 130.20 billion at the end of 2018. The largest cryptocurrency, Bitcoin, accounted for 68.2 per cent of this figure, or USD 131.90 billion, as of 31st December 2019. ASIC chips used in blockchain applications generally excel at processing the targeted application but has little flexibility to process other types of transactions. Ebang claims to be one of the few fabless integrated circuit companies with the advanced technology to independently design this kind of technology, have access to third-party wafer foundry capacity and the in-house capability to produce blockchain and telecommunications products. The company is also one of the earliest contract manufacturers of Bitcoin mining machines in China to own self-developed proprietary ASIC chips. It generated revenues of USD 319.00 million and USD 109.10 million in the financial years ended 31st December 2018 and 2019, respectively. Ebang incurred net losses of USD 11.80 million and USD 41.10 million in FY 2018 and FY 2019, respectively. Proceeds from the IPO will finance the expansion of the group’s overseas and new businesses; the development and introduction of new mining machines; and corporate branding and marketing activities. © Zephus Ltd

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