Interesting piece, less generic than the usual MSM article about crypto.
1. While Wu Jihan is the most famous name at Bitmain, co-founder Zhen Ketuan has a larger stake.
I didn't know that.
4. Bitmain has been active with deals since June. Its purchase of a stake in Opera Ltd. values the maker of web browsers at $1.67 billion, making yet another unicorn.
I'd read about this only a few days ago. Opera used to be an innovative company. Their browser was arguably the best - surely the quickest and leanest of them all, fully customizable, and if I'm not mistaken, the first to feature browsing tabs in the early 2000's. However, they couldn't sustain developing their own rendering engine and dropped it for Google's, so now it's just a Chromium browser - and not the best of the pack.
7. Last week I predicted that Bitmain’s high exposure to a very unstable industry could see heavy writedowns. That’s exactly what happened in the first half, hitting profits heavily.
Biggest Loser
Bitmain regularly loses money from its management of inventories and other balance sheet items. The first half of 2018 was particularly painful.
They will have to keep on delaying deliveries of new miners and enjoy their ius primae noctis to capitalize on mining advantage. If I were a customer pre-ordering mining equipment, I'd be very, very wary, even more so than before.
Perhaps Bitmain’s biggest risk is its high holding of cryptocurrency, which far eclipses the company’s pile of fiat cash.
Crypto Heavy
Bitmain holds twice as much cryptocurrency as it does fiat.
The article doesn't detail how much of that is bitcoin and how much is bcash. I think it's an important piece of information.
10. Taking such a large portion of its payments in cryptocurrency also has a big impact on its cashflow statement.
Old corporate money shouldn't like this too much. Free cash flow is too good to give up for magic internet money, especially if it's an altcoin. This might be the reason Bitmain stopped the "bcash only" policy for payments.
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