Crypto Mining Giant Bitmain's IPO Application Has Officially Expired

Cryptocurrency mining equipment maker Bitmain's application for an initial public offering on the Hong Kong Stock Exchange has officially lapsed, meaning no such transaction is happening anytime soon.

From the HKEX, "The latest financial period reported on by the reporting accountants for a new applicant must not have ended more than six months from the date of the listing documents." However, the last public filing from Bitmain only covers the period ending June 30, 2018, nearly nine months ago.

The application drew wide attention last fall as Bitmain disclosed eye-popping profit growth over the past several years.

Despite such rapid growth in the bottom line, reflecting the surging cryptocurrency market of 2017, the HKEX was hesitant to approve applications from Bitmain and its mining rivals Canaan Creative and Ebang, due to the industry's volatility.

"Bitmain's listing application to HKex in September 2018 has reached its 6-month expiration date. We will restart the listing application work at an appropriate time in the future."

Haichao Wang, previously a director of product engineering at Bitmain, was officially appointed Bitmain's CEO, months after news report said a management shakeup was in the works.

As of June 30, 2018, Bitmain had a $715 million liability on its balance sheet labeled "Redeemable, convertible and preferred shares," resulting from its Series A and Series B funding rounds closed over the past two years.

According to the company's IPO prospectus, the terms Bitmain agreed to with these investors included a redemption clause, which gives shareholders the right to require Bitmain to redeem or repurchase all or part of their shares if either one of two events happens.

Series B+ round investors could require Bitmain to redeem the shares in an amount equal to the purchase price plus "All declared and unpaid dividends" and "An assumed 10% compounded" annual return for each year such shares are outstanding from the closing date, less any amount received by the investors.

Although the amount of money Bitmain intended to raise from the IPO was also redacted from the HKEx prospectus, documents obtained by CoinDesk last summer indicated the proceeds would have been as high as $18 billion at a market capitalization of $40 to $50 billion.