Bitmain IPO: Is the Unicorn Mining Giant Misleading Investors?

As a pioneer of ASIC mining chips, Bitmain controls approximately 70 percent of the mining chip market and is also responsible for a substantial chunk of Bitcoin's computing power through its mega-mining pools Antpool and BTC.com.

Given their massive profits, and news of a $1 billion pre-IPO-financing round, Bitmain's valuation rose to $15 billion and its highly anticipated IPO was expected to join the ranks of IPO historical giants like Spotify, Facebook and Alibaba.

Thanks to a combination of self-inflicted mishaps and diligent sleuthing, it has been revealed that Bitmain has three major problems that both hurt their credibility and the potential of their IPO:.The denial of SoftBank of investing in Bitmain.

While the Bitmain IPO may still end up being a wild success, its lack of transparency and precarious position do warrant second considerations.

News of SoftBank, one of Japan's most successful companies, and Tencent, the world's biggest investment corporation, being part of the $1 billion pre-IPO-round was initially viewed as a very strong endorsement of Bitmain.

Bitmain's affinity for Bitcoin Cash also appears to be a potential weakness and may be the reason for their IPO. According to popular Twitter threads by Samson Mow, Parabolic Trav and WhalePanda, as well as the analysis of Crypto Herpes Cat on Medium, Bitmain hemorrhaged itself by selling most of its BTC holdings for BCH. They are now believed to hold around 1 million BCH.The first column, BTC quantity from EOY 2016 to 2017 drops from 70k coins to 35k coins.

According to Mow, this perfect storm has caused Bitmain to lose anywhere between $600-700 million in Q2 and is partly the reason for the IPO and a much-needed cash boost.

Bitmain is sitting on a massive $1.24 billion USD in inventory & S9 prices dropped by ~85%! Q2 losses range in the $600-700 millions.

As the founders of the revolutionary ASIC miners, Bitmain has long been the leader of the mining chip industry; however, it seems they're struggling to produce the next generation of Antminers.

Perhaps this scrutiny is overblown, and Bitmain ends up once again delivering a superior mining chip and re-establishing its dominance in the crypto economy.