[Breaking]: Bitmain Lost $700 Million in Q2, Will Be Net Income Negative By End of the Year, According to Source


Bitmain Lost $700 Million in Q2, Will Be Net Income Negative By End of the Year, According to Source

A mysterious “Bitmain source” has surfaced to make some surprising claims about the Chinese mining giant. Just hours after Bitmain filed its intention to launch an IPO, that Bitmain source revealed that the company was shifting losses around to make its financial picture better than it appears.

The source comes from noted Bitmain critic BTCKING555 (@btcking555) on Twitter. Earlier today, just a few hours after Bitmain filed its IPO application, that user tweeted something surprising citing a “Bitmain source”:

In a follow-up tweet, BTCKING555 added that:

This all sounds extremely dramatic and scary for Bitmain supporters. However, as far as we can tell, BTCKING555 is just trying to attract attention online. The data posted by BTCKING555 doesn't actually show a loss: they just show that Bitmain made less profit in Q2 2018 than it did in Q1 2018.

In Q1 2018, Bitmain earned $1.1 billion in profit. In Q2 2018, Bitmain earned $400 million in profit on $900 million of revenue. Based on these two statistics, BTCKING555 is ranting on Twitter about how Bitmain “lost $700 million in Q2” and that the company will be “net income negative by the end of the year.”

BTCKING555 hasn’t provided much proof for his dramatic rant online. As many analysts have pointed out, Bitmain’s profits and revenue appear to be following the rises and falls of the crypto industry. The numbers don’t seem to indicate that Bitmain is collapsing.

Question Marks Surround Bitmain In the Leadup to Its IPO

China-based crypto mining giant Bitmain currently dominates the mining hardware space. Approximately 70% of the bitcoin network is run by Bitmain miners, and the Bitmain Antminer S9 is the most popular bitcoin miner in the world today.

Despite its dominance, the Chinese mining giant has faced criticism over the past year. Bitmain CEO and co-founder Jihan Wu is a controversial figure in the space. Some dislike Jihan because he supports BCH over BTC as the true version of bitcoin, for example. Others dislike Jihan because he called Craig Wright “fake Satoshi”. In China, Jihan has been criticized for engaging in unethical business practices to target Bitmain’s competitors.

Amidst all of this controversy, Bitmain continues to prepare for its IPO. Bitmain wants to go public.

Is Bitmain’s IPO an “Exit Scam”?

Some call Bitmain’s IPO “the biggest exit scam of all time”. Others see it as an ordinary next step for the largest bitcoin mining company in the space. By going public, Bitmain will be able to compete with some of the world’s largest chipmakers – like Nvidia and Intel.

Of course, that IPO might not go as scheduled if Bitmain’s vocal critics are to be believed.

BTCKING555 reports that Bitmain is experiencing significant financial problems. After earning over $1 billion in profit in Q1 2018, Bitmain has reportedly lost hundreds of millions of dollars in the months since.

The tweets above show that, according to BTCKING555’s Bitmain source, Bitmain lost $700 million in Q2 2018 but only reported a loss of $450 million on its IPO filing. This suggests that Bitmain is shifting its losses to Q3 2018, which means Q3 losses could be even bigger.

The losses are so big, according to BTCKING555, that Bitmain will be net income negative by the end of the year. Yes, after earning profits of over $1 billion in the first three months of the year, Bitmain could be net income negative by the end of the year.

In a follow-up tweet, BTCKING555 posted a document that appears to show financial data from the Chinese mining giant. The picture describes the “Bitmain disaster” of Q2:

It’s unclear what BTCKING555 means with this tweet. The documents show that Bitmain earned $1.1 billion in Q1 2018, and then earned $400 million more in Q2 2018 from $900 million in revenue.

Nevertheless, BTCKING555 continues to rant on Twitter about being the only “real analyst” investigating Bitmain while complaining that nobody believes him.

Is Bitmain Really In Trouble?

Ultimately, it’s hard to know who to believe. Crypto critics online are notorious for making up sources and fabricating claims to get attention. BTCKING555 claims to have a “Bitmain source” and has posted an image of a document as “proof”.

Even if the information is legitimate, however, the documents don’t show any losses for Bitmain; instead, they show that Bitmain continues to be enormously profitable. After earning $1.1 billion in Q1 2018 at the height of the crypto market, Bitmain’s profits dropped to $400 million in Q2 2018 on revenue of $900 million.

BTCKING555 is screaming on Twitter about how this indicates a “700 million loss” and that Bitmain will be “net income negative” by the end of the year – but the documents he provided online don’t seem to indicate that.

In any case, the controversy over the leadup to Bitmain’s IPO continues to unfurl. Take anything pundits like BTCKING555 say online with a grain of salt, however, and understand that everyone has a bias and an angle online.

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