Bitmain Plotting $18 Billion Record Breaking IPO
Bitmain is plotting a record-breaking Initial Public Offering once it goes public later in the year, given the number of investors yearning for a piece of its pie. Immediate reports indicate that the producer of cryptocurrency mining equipment is targeting as much as $18 billion from the offering. If successful, the IPO will surpass the $16 billion raised by Facebook when it went public.
The $18 Billion IPO price target would take the company’s market capitalization to between $40 and $50 billion. Bitmain has already closed pre-IPO financing, which underscores strong demand from firms and individuals yearning for a piece of its success story.
The company successfully closed pre-IPO financing of about $ 1 billion pegged at $15 billion valuation. Some of the participants in the financing round included a $15 billion asset management firm, China National Gold Group as well as Softbank Group and Tencent Holdings Ltd. To take part in the financing round the firms had to commit a minimum of $5 million.
Bitmain is believed to have raised $50 million in its first Series A funding, which increased six-fold to $400 million when it held its second Series B funding round. It now looks set to surpass the milestone when it goes public later in the year.
The company has already contracted China International Capital Corporation to oversee the underwriting process. Bitmain is to list its shares in the Hong Kong Stock exchange sometime in the first quarter of 2019. It is still unclear at what price the company’s shares will go on sale as well as volume. However, the company expects a P/E ratio of 20 for the first year trading as a public company.
Bitmain remains the talk of the cryptocurrency space in part because of its successful business model. Since 2016, the company has generated a total profit of $3.2 billion, something that seems to have caught the attention of investors and firms yearning for a piece of the pie. It is currently rated as the most valuable cryptocurrency company.
Founded in 2013, Bitmain produces chips and equipment used in the mining of cryptocurrencies. In an attempt to diversify its revenue streams, the company has diversified its operations having started manufacturing hardware chips for the artificial intelligence industry.
Widespread adoption and acceptance of cryptocurrencies is the latest trigger behind increased demand for mining equipment, something that the company is banking on as it eyes profits of $2 billion by the end of the year.