Bitmain’s IPO May Boost Its Valuation Up to $35 Billion
Chinese bitcoin mining giant Bitmain is reportedly preparing to submit its listing application to the Hong Kong Stock Exchange (HKSE) and is expected an official launch in Hong Kong by the end of this year. Based on the data from local tech media outlet All Weather TMT, the IPO valuation is in the range between US$30 to 35 billion and it will become the largest blockchian IPO in the capital market worldwidely.
According to All Weather TMT, Bitmain is going to hand in its listing application to the HKSE on August 30 and may complete the list processing by the end of 2018. The China International Capital Corporation Limited (CICC) will hold the post of the lead underwriter of Bitmain’s IPO.
Bitmain’s pre-IPO fund of US$500-1000 million will be delivered in the near future. Tencent, EDBI (the investment institution established by the Singapore Economic Development Board), the Abu Dhabi Investment Authority and the Canadian Pension Fund are all in the investor list.
An investor in this round of funding disclosed that Jihan Wu, the founder and CEO of Bitmian has signed the Term Sheet (TS), and this round of financing will be closed soon.
Bitmain was valued at US$14 billion before the pre-IPO funding, after it complete the fund raising, valuation of the firm is approximately US$15 billion, and institutional even valued it at US$18 billion. After the listing, Bitmain is expected to be valued more than US$30 billion, perhaps it could be valued at US$35 billion.
Some investment institutions believe that the valuation of Bitmain after listing is too conservative as its competitor Canaan has been valued at HK$100 billion in the pre-IPO stage.
It was also reported that this pre-IPO funding has a repurchase clause. If Bitmain cannot go public successfully within five years, the company will have to repurchase at a 10% annualized interest rate.
In addition, the proportion of the outside shareholders of Bitmain is relatively low. Before the Series B funding, its outside shareholders proportion was less than 5% while on the pre-IPO stage, the proportion of outside shareholder is still less than 15%.
In the listing rules of both Hong Kong stocks and the US stocks, listed companies that are “concentrate holding shares” or with low social holdings will face relatively strict audits.