[2019-09-22] Why Bitmain is Purposely Losing Money in its Bitcoin Mining Busines

[MathGame]

According to BitMEX Research, a group of analysts at major Bitcoin exchange BitMEX, Bitmain has been intentionally lowering the profit margin of its core business prior to its initial public offering (IPO).

As the biggest and most profitable conglomerate in the history of the cryptocurrency sector, Bitmain has attracted some of the largest investors in the technology space including Softbank, raising pre-IPO mega-rounds.
Its IPO that is scheduled to be conducted in Hong Kong is said to be in the region of $20 billion, raising several billions of dollars in the process.

But, its recent controversy around its latest funding round that allegedly did not involve Tencent contrary to many reports, led investors to question the Bitmain IPO and its lucrative mining business.


Continue @ https://cryptoslate.com/why-bitmain-is-purposely-losing-money-in-its-bitcoin-mining-business/

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[squatter]

I'm glad someone reposted this... apparently it was published three weeks ago.

This is an interesting angle I hadn't considered. People have been speculating that Bitmain's recent lack of profitability and new product development (prior to the recently announced BM1391) were signs that the IPO was desperate move. Maybe that's not the case after all.

I'm not sure how it measures up to Bitfury's new miners, but the BM1391 sounds far superior to GMO's offerings if Jihan Wu's numbers are accurate.

[buwaytress]

Strange I missed this news too, generally anything Bitmain or their IPO gets broadcasted on so many legs. You can bet that if they're actually making public diminished returns, it's manipulation. Risky move really, because when they get found out like this, the backlash tends to be swift and sustained. Any drop in profitability has to be foreseen, or deliberately engineered. Tell you what though, all this questioning isn't going to dampen their latest round of fundraising. At least on paper, they already know what numbers need to be met, and they'll "reach" that target no matter what. Well-oiled machine, these guys.