Ebang Sets Price Range for $125 Million IPO in New York

The maker of Bitcoin mining machines seeks new capital for overseas expansion.

Author: Anna Vodopyanova   

Ebang International Holdings Inc., rushing to a U.S. IPO ahead of a possible crackdown on Chinese listings, has set the expected price range for its shares.

The company said in an updated prospectus today that it seeks to sell 19.3 million ordinary shares priced at $4.50 to $6.50 a share. At the top of the range, the Hangzhou-based maker of Bitcoin mining hardware would raise $125.5 million – more than its initial estimate.

AMTD Global Markets Ltd., Loop Capital Markets LLC, and Prime Number Capital are securing the deal. Underwriters have an option to acquire an additional 2.9 million shares upon the IPO for over-allotments.

Ebang designs application-specific integrated circuits (ASICs) and makes mining equipment for Bitcoin. It is also developing 5-nm ASIC chips and mining machines for non-Bitcoin cryptocurrencies such as Litecoin and Monero. Ebang is a fabless company; all its chips over the past two years were manufactured by South Korea's Samsung Electronics (OTC: SSNLF), according to its filing.

If successful, Ebang will become the second company that designs ASICs and makes mining hardware to list on the Nasdaq after rival Canaan (Nasdaq: CAN) debuted in late November. Issued at $9 per American depositary share, CAN stock was trading by midday at $1.92 per share – the lowest level it has yet seen. In fact, CAN's trading 4% lower today may be attributed to the nearing of an IPO by a rivaling player.

Looking at the two companies' financials side-by-side, Canaan has posted more in revenue but also in losses. For the full year 2019, Canaan posted revenue of $204.3 million on losses of $148.6 million while Ebang reported revenue of $109.1 million compared with $319 million in 2018. Losses amounted to $42.4 million from $12.3 million in the preceding year. 

Ebang seeks to become publicly traded on the Nasdaq Global Market under the symbol "EBON." 

It said it aims to use the proceeds "for expansion of overseas business and new businesses, development and introduction of new mining machines, and corporate branding and marketing activities."

Among the risks Ebang noted in its filing with the U.S. SEC, it said its auditor has not been inspected by the Public Company Accounting Oversight Board (PCAOB). The U.S. Congress is currently reviewing a bill subjecting all foreign listings to subject to the dreaded PCAOB inspection. 

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