Crypto mining maker Bitmain purportedly lost $500 million in the third quarter of fiscal year 2018, according to reports emerging early on Feb.19.
Downhill: $1 Billion To $500 Million
The mining equipment making giant, as per the cited report, generated revenues in advance of $3 billion in the first three quarters of 2018 with a profit of $500 million.
However, the firm’s profit had dwindled by nearly $500 million after data compiled from the first half of 2018 showed a profit of $1 billion.
The loss came at a time when the crypto market was in the bear’s grip, which led to decline in demands for mining equipments.
This news might complicate Bitmain’s bid for the approval and listing of their planned initial public offering (IPO) on the Hong Kong Stock exchange (HKEX).
The report came out during the firm’s submission of documents as a pre-requisite for applying to register their digital asset.
Bitmain’s co-CEOs, Jihan Wu and Zhan Keyuan, have reportedly lost their jobs with the crypto mining giant on the back of the firm’s falling sales numbers. Both, however, remain to be associated with the company as co-chairman’s.
The company has also laid off a majority of its workers around the globe. One report stated that Bitmain had suspended its Texas crypto mining operations, a combined 7,000 to 8,000 crypto setups having shut down altogether.
The company is going through a tough patch with its IPO hanging in the balance, one which is said to be the company’s only bankable factor at the moment to raise significant funds.
Does Bitmain Have A Sustainable Business Model ?
Charles Li Xiaojia, CEO of HKEX, has himself raised doubts about the sustainable nature of mining business houses like Bitmain, which might have been a pointer to the lower number of mining operations during, what has been dubbed, the crypto winter.
Even investors seem distant from the idea of Bitmain’s new venture and have recently questioned the premise which labels the crypto mining business still being economically beneficial.