[MUST-READ] China’s Caijing Financial Publisher Destroys Bitmain IPO in Latest Report

Chinese Financial Giant Publishes Scathing Report on Bitmain IPO Fiasco; Samson Mow's Take

Chinese financial publication Caijing just published an in-depth piece on the Bitmain IPO fiasco. The article mentions massive Q2 losses and pre-IPO investors jumping ship among other serious problems.

The article was highlighted by Samson Mow (@Excellion) on Twitter earlier today. Mow, the Chief Strategy Officer at Blockstream, summed up key points from the article.

Key points from the article include Bitmain patents that had been rendered invalid, pre-IPO investors jumping ship and denying involvement, and the tech teams behind the S7 and S9 departing the company.

It’s been a bad few weeks of news for Bitmain. Earlier this month, analysts criticized the company for swapping BTC for BCH, a decision that led to enormous losses as BCH’s price sank relative to BTC. BCH’s price sank even further when it was revealed that Bitmain is reportedly sitting on a hoard of 1 or 2 million BCH – reportedly as much as 11% of the total supply of BCH.

Then, this past week, Samson Mow continued his attack on the company. Mow, on Twitter, reported that Bitmain’s divisions were abandoning the company:

“Three Bitmain teams abandoned the company in recent weeks: one group from operations and manufacturing, & two groups from their chip design division. One of those groups is actively trying to raise capital to compete with Bitmain. They approached a friend of mine. #BitmainIPO”

Mow added to the problematic week earlier today by tweeting about the Bitmain piece by Chinese financial publication Caijing. That piece does not paint Bitmain in a positive light. It appears to indicate some serious problems within the Chinese mining giant.

Caijing Explains Pre-IPO Investors Jumping Ship, Massive Q2 Losses, and Other Issues

Samson Mow tweeted some of the key points of the Caijing article in English. While we can’t independently verify the translation, here are some of the key points of the Caijing article, as translated and tweeted by Samson Mow earlier today:

  • Bitmain only survived the bear market of 2015 to 2016 because of Yang Zuo Xing’s chip designs on the Bitmain S7 and S9 miners. Yang Zuo Xing is also credited as “The reason they were able to capture a large market share.” Yang no longer works for Bitmain. He started a competing company called ShenMa.
  • After Yang Zuo Xing left, Bitmain was unable to create any new chips successfully. Bitmain’s 16nm chip, the BM1x89 failed, as did the following BM1X90 12nm and BM1X93 10nm chips.
  • Bitmain is reportedly working on 7nm chips today “but gains are minimal”.
  • While Bitmain’s bitcoin miners struggle to stay relevant, the company has also struggled to maintain its competitive edge in altcoin markets. “Bitmain’s altcoin miners are all outclassed by competitors and their Sophon AI chips consume 3x more power than those of their competitors,” explains Mow, quoting the article from Caijing.
  • Bitmain sued Bitewei (ShenMa) over a serial power supply circuit patent. Bitmain wanted to prevent manufacturers from working with Bitewei / ShenMa. In April 2018, however, China’s State Intellectual Property Office invalidated Bitmain’s patent because Bitmain had attempted to patent “common knowledge or prior art”.

Samson Mow also revealed that Bitmain isn’t the only Chinese mining giant attempting to launch an IPO. Three large mining companies are reportedly trying to IPO in Hong Kong, according to Mow. This past week, Bitmain started the IPO process with HKEX Group. Other mining companies, meanwhile, are bringing out new products and waiting to get a slice of the pie.

“Staying #1 will be hard,” concludes Mow.

Ultimately, we’ve heard rumors of Bitmain’s troubles all summer. This latest piece from Caijing appears to substantiate some of the rumors. Nevertheless, Bitmain earned over $1 billion in profit in the first quarter of 2018 and continues to be the world’s largest crypto mining hardware manufacturer. Will Bitmain continue to hold onto power? Or is this the beginning of the end for the Chinese mining giant?


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