Ebang mining company revenue halved due to COVID-19 pandemic

Due to the pandemic, microprocessor manufacturers have reduced their production capacity. Ebang is short on ASIC components.

In the first half of 2020, the revenue of the Chinese mining company Ebang International Holding fell to $ 11 million, which is 50.6% less than the $ 22.35 million received a year earlier. A financial report for the US Securities and Exchange Commission (SEC) said that the COVID-19 pandemic was the reason for the decline in income.

Ebang Chairman and CEO Dong Hu writes that due to the pandemic and related restrictions, microchip manufacturers have been forced to reduce their manufacturing capacity. This, in turn, hit the Ebang business – the company lacks components for the production of ASIC devices.

Despite the decline in net income, Ebang managed to save more than $ 10 million through lower operating costs. According to unaudited reports, in the first half of 2020, the company’s net loss fell to $ 7.3 million – in the first half of 2019, the loss reached $ 17.6 million. According to Hu, in this situation, Ebang “is optimizing its income structure <…> and is exploring the possibility of expanding the range of financial services provided on the basis of blockchain. ”

Ebang is filing reports with the SEC because the company held an IPO on the NASDAQ US stock exchange in June 2020. Ebang has listed 19.3 million Class A common shares at an initial price of $ 5.23 per share. Shortly before the placement, Ebang raised its IPO expectations to $ 125 million, but this goal was not achieved – the company raised $ 101 million from investors.

Against the background of the publication of reports, shares of Ebang, which are traded on the NASDAQ under the ticker EBON, fell 1.62% to $ 9.80 per share. However, the company’s quotes have risen 96% since the IPO.

Ebang stock quote on NASDAQ. Source: TradingView

Recall that Ebang is preparing to open a cryptocurrency exchange in Singapore. To this end, the company registered a subsidiary in the city-state and requested a license from local regulators for the relevant activity. Ebang warned its shareholders that there is no guarantee that it will be able to obtain a license on “commercially reasonable terms” or even launch the platform.

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