Mining Giant Bitmain Posts $500 Million Loss in IPO Financial Filing

[pooya87]

well keeping a dying shitcoin (ie. bcash) takes a lot of money. they need to throw man power, hashing power, money at exchanges for pumping purposes,... and it may not look it but all of these things cost a lot of money. and they have been doing it for over a year now and with bitcoin price declining their main source of revenue has also been decreasing so they didn't have as much money to cover those costs.

Too early to blame everything on BCH. That coin is getting so insignificant nowadays..

i am not blaming anything on BCH, i am saying those who created BCH and spend money on keeping it alive and pumping it lost a lot of money.
and why do you think it is  too early? it has already bee a year and a half of wasting money which is more than enough time to destroy any company let alone a company like bitmain which has been balls deep in BCH.

[Steamtyme]

~snipped my quoted text~

September ended with BTC at 6500 and Bshit at (lol, had to double check ) at 550$.
So if they did lose 500 in the 3rd probably it's way above 750 or even 1 billion for Q4.
What matters is the long run and if they did start loosing that much probably the entire profit has evaporated till now.

~snipped my quoted text~

The s15 was announced in November and it took Bitmain more than two years to launch a new miner, so I really doubt they had spent most of the money on research and development just 4 months earlier.
Probably they had it ready for production even at the start of the year.
Second, I doubt the booming sales for it, the hash rate shows that prices have made a serious dent in miner sales (we're at August levels right now).

As far as their losses for Q4 they could still afford to hemorage another 500 Million and break even on the year. If they ended the year at break even with 2 efficient chip designs that blow the competition out of the water they're starting ahead in 2019. We'll just have to wait and see in their next filing how Q4 went. While I don't doubt they were struggling with liquidity for a bit, I think there sales team cut the right deals/discounts at the right time to being an influx of cash in.

It may have been 2 years to launch a completely new design, but they did continuously tweak/rebrand that previous model. Also they sat at the top of efficiency for that chip size as far as they were concerned so no need to redesign what's working. It was really only early 2018 that any of the hardware companies started pushing for 7nm designs, the S15/T15 chips themselves were announced in September, so that Q3 could have been a lot of the first run costs. Here we are just as few months later and they have another chip launch.

I do think hardware sales still picked up for them, while people weren't expanding and growing as fast they were still upgrading to newer more efficient models while prices are low. Hashrate is a hard indicator in the hardware sales, as a lot of people/mines tried to hold on as long as they could last year in hopes the market turn was around the corner.

also. seems the article cant do maths

think about it.
imagine you get $500 one week. $500 second week. then you have to buy groceries and rent the third week. would you go to your spouse and say "i declare a $500 loss." or would you say "i stil have $500 after 3 weeks"

Okay glad I wasn't the only one reading it that way.  Love the example

[franky1]

Okay glad I wasn't the only one reading it that way.  Love the example

coindesk is owned by DCG. which funds blockstream and other companies which have a certain idea of how bitcoin should be.

another thing about DCG is they own BTCC..
and yet here is the funny.
BTCC has virtually disappeared. but you dont hear news about it. big BTCC names like samson mow. shifted from BTCC to blockstream and coindesk has been very quiet about the strip down and shut down of BTCC.
bobby lee is now concentrating on the convention/conference organisation circuit that ar usualy dirctly or indirectly funded by coindesk(dcg)

so that might help explain why you were reading a coindesk article that was trying to influence readers to suggest bitmain was in trouble, when it wasnt. as there has been ongoing social drama between the two

anyway
bitmain continued to make s15, and now funding to make s17. if they were in trouble they would have gone and 'done a BTCC'. but instead bitmain are just carrying on doing what they do each year.

in my eyes coindesk and DCG are butt-hurt that they invested into the wrong pool company

[stompix]

~

As far as their losses for Q4 they could still afford to hemorage another 500 Million and break even on the year. If they ended the year at break even with 2 efficient chip designs that blow the competition out of the water they're starting ahead in 2019. We'll just have to wait and see in their next filing how Q4 went. While I don't doubt they were struggling with liquidity for a bit, I think there sales team cut the right deals/discounts at the right time to being an influx of cash in.

It may have been 2 years to launch a completely new design, but they did continuously tweak/rebrand that previous model. Also they sat at the top of efficiency for that chip size as far as they were concerned so no need to redesign what's working. It was really only early 2018 that any of the hardware companies started pushing for 7nm designs, the S15/T15 chips themselves were announced in September, so that Q3 could have been a lot of the first run costs. Here we are just as few months later and they have another chip launch.

And exactly the launch of the BM1397 that is going to "outclass" as they say the not even 6 month old BM1391 is one reason I think it's not the R&D costs alone that made a 500 million hole or if indeed that's the case prepare for another larger one.
If the costs for the 1391 were to blame for the deficit in Q3 the newly launched 1397 will also leave its mark in the Q4 as it would make simply no sense to develop them both in Q3, wouldn't it?

And...the 500 is losses, not costs for R&D so this has not only taken in all the profits from other activities but it has dug a hole, and now they are most likely going to experience lower profits from mining (probably only half) and around the same development costs.

Would the same miners that stayed away from the s9 or the competition (the m10 for example) in September buy now when profits are at an all-time low and drive up income from mining gear sales?
Not really seeing anything like in the hashrate....

[r1s2g3]

For so gigant companies 500 millions is really little money, they even dont care about this lose, I think.

Every company is concerned with loss and bitmain should be no exception.
Their BCH drama hit themselves as well as the price of BTC and hashrate of BTC. It will be interesting to see how their power efficient new asic miner will turn the game for them as well as btc price. 

[Steamtyme]

And exactly the launch of the BM1397 that is going to "outclass" as they say the not even 6 month old BM1391 is one reason I think it's not the R&D costs alone that made a 500 million hole or if indeed that's the case prepare for another larger one.
If the costs for the 1391 were to blame for the deficit in Q3 the newly launched 1397 will also leave its mark in the Q4 as it would make simply no sense to develop them both in Q3, wouldn't it?

It definitely could. Hard to say how they went about trying to achive their most efficient design. They may have ran the R&D simultaneously, or started on the next design immediately after the last. All I'm saying with this is that it would have been a huge chunk of upfront cost, and a very likely factor in the difference between profits and loss between quarters last year.

And...the 500 is losses, not costs for R&D so this has not only taken in all the profits from other activities but it has dug a hole, and now they are most likely going to experience lower profits from mining (probably only half) and around the same development costs.

You right, everything slowed last year slowly and steadily as far as hardware and mining profits. What is surprising is that all the way into October apart from 1 Diff adjustment it was rising. This had to take a tole on them as much as everyone else; but they still were pulling in a good amount of revenue from their pools and cloud mining business. They are well diversified to earn any way they can off people. For whatever reason people still point miners there for daily payouts, and rent hash off them, it just wasn't enough to overcome their total expenses; whatever they were.

Would the same miners that stayed away from the s9 or the competition (the m10 for example) in September buy now when profits are at an all-time low and drive up income from mining gear sales?
Not really seeing anything like in the hashrate....

They would I think. Hashrate follows the market so we have been in a pretty steady decline for a while, this has made mining more profitable than it was in September of last year. So all of this gear is looking good right now, so much so that some competitors had begun to raise prices. The big boost to Bitmain at the moment is that they sent out a ton of coupons hoping to push a massive amount of hardware sales starting Feb 26. assuming BTC stays below 4400$ (can't recall for sure). They also have BitDeer cloud mining running hard since December, they have different tiers for what Gen miner you run and charge the maintenance fee based on that. This gives them the ability to possibly earn off the maintenance fee by actually using the efficient gear and charging for the inefficient.


When it comes down to it it's hard to know how the actually account for their held/stored coins; or when they dump some to raise liquid capital. They may be in no trouble at all and simply pull from a reserve when they need the cash. Like I said before it will be interesting to see what their next couple fillings look like.


While poking around it looks like Canaan decided to try for an IPO in NY, they let the HK application lapse. There was next to no information about it from the little I read but that's another one to watch in the coming months.

[stompix]

~.

You right, everything slowed last year slowly and steadily as far as hardware and mining profits. What is surprising is that all the way into October apart from 1 Diff adjustment it was rising.

This shows just how productive bitcoin become after the jump and the lack of miners on the market.
ETH managed to reach a stability point even with the insane increase after about 6 months of GPUs shortage, for BTC it was still profitable even with jack up prices (I remember something over 1200 for an s9???)

They would I think. Hashrate follows the market so we have been in a pretty steady decline for a while, this has made mining more profitable than it was in September of last year. So all of this gear is looking good right now, so much so that some competitors had begun to raise prices. The big boost to Bitmain at the moment is that they sent out a ton of coupons hoping to push a massive amount of hardware sales starting Feb 26. assuming BTC stays below 4400$ (can't recall for sure).

I'm keeping an eye on the whole mining stuff from the side but I simply can't make the final push to go into mining again.
I'm getting energy at 6c/kwh at home, I might be able to get enough for 3 or 4 s15 at my parent's farm for 4c/kwh and on top no Trump tax, lols.

But still, when I look at those 500 days of ROI, taking into account a miner is worth ~1600 so if it goes bum...that's half a BTC thrown away. And if you think big, there are a lot of other stuff that can go wrong, costs, people, contracts headaches after headaches.

Don't get me wrong, I don't think that bitmain is going to go kaput in the next year, just that their model of gluing some components on a motherboard mining with it 3 months then selling it for 5 times the price and making millions with no bumps it's over.

[franky1]

Hashrate follows the market

actually. the market follows the hashrate.

take 2013
asics hit the market in october of 2013... market rises

take 2018
next gen asics announced.. so selling off of old s9's dirt cheap in october. less hashpower. means those left get biggr slice of th reward pie. meaning they profit more meaning they sell more.. thus novembers price decline

..
what you need to separate is the mindsets of certain people.
smart mining groups plan a year in advance. they dont react to price drama. they contract their electrical costs in, a year ahead with calculated predictable rises included. they buy /make asics at set schedules. they sell coins OTC based on contracted amounts/prices. thus market prices doesnt affect business much(though they can take advantage of market prices using excess coins)

its the small home/basement/garage hobbiests that react to markets. by 'pool jumping' depending on most profitable coin of the day

if you look at the pools as a whole and compare the market prices. you see the smart pools thats hashrate averages have a smoother change.. the dumb pools usually have no smooth change and just all over the place.
this is why BTCC didnt last. they were market followers. based mainly due to them being management of home/hobbiests

[Wind_FURY]

Okay glad I wasn't the only one reading it that way.  Love the example

coindesk is owned by DCG. which funds blockstream and other companies which have a certain idea of how bitcoin should be.

another thing about DCG is they own BTCC..
and yet here is the funny.
BTCC has virtually disappeared. but you dont hear news about it. big BTCC names like samson mow. shifted from BTCC to blockstream and coindesk has been very quiet about the strip down and shut down of BTCC.
bobby lee is now concentrating on the convention/conference organisation circuit that ar usualy dirctly or indirectly funded by coindesk(dcg)

That's irrelevant. The Digital Currency Group has invested in many cryptocurrency companies, that sometimes they're in competition with one another. BTCC has shut down, so what? There are others.

so that might help explain why you were reading a coindesk article that was trying to influence readers to suggest bitmain was in trouble, when it wasnt. as there has been ongoing social drama between the two

anyway
bitmain continued to make s15, and now funding to make s17. if they were in trouble they would have gone and 'done a BTCC'. but instead bitmain are just carrying on doing what they do each year.

in my eyes coindesk and DCG are butt-hurt that they invested into the wrong pool company

Then why doesn't Bitmain file libel charges if the news is not based on facts?

Plus wait for the 4th quarter financial report.

[stompix]

Hashrate follows the market

actually. the market follows the hashrate.

I can totally see the correlation!

That's irrelevant. The Digital Currency Group has invested in many cryptocurrency companies, that sometimes they're in competition with one another. BTCC has shut down, so what? There are others.

How old is that picture?

BtcJam? Hashplex?

[franky1]

Hashrate follows the market

actually. the market follows the hashrate.

I can totally see the correlation!

UNDERLYING VALUE is not "market price"
when YOU see the market price all you are seeing is the speculative bubbles that sit above the water line of a bath tub. your not seeing the underlying water line

how ever during low speculation/bubble periods where you get to see the waterline beneath. its much clearer to see the mining:market dynamics at play.


take the OCTOBER'13 hashrate rise, and THEN the market rise
take the OCTOBR'18 hashrate curve down, and THEN the market dip
there are multiple other examples over the years. but if you just want to look at the market speculative prices.. then ill save the explanation for another time when you might b ready to go beyond the basics

[stompix]

take the OCTOBER'13 hashrate rise, and THEN the market rise
take the OCTOBR'18 hashrate curve down, and THEN the market dip
there are multiple other examples over the years. but if you just want to look at the market speculative prices.. then ill save the explanation for another time when you might b ready to go beyond the basics

Let's take two arbitrary single value points and let's draw a final conclusion, ignoring a two-year continuous graph that screams otherwise.
Totally legit!

Besides, stop pulling things out of you know what!

Let's analyze the October 2018 scenario:
Between October 04 and 18 the hashrate dropped 3.65%, the price went up 0.68%.

I'm having trouble understanding who is following who when things are going in the opposite way.  

Also interesting how you managed to find as an example exactly the beginning of the hashwar between shitcash and fakeshitcash when massive amounts of hashing power were diverted to those chains. You really have an obsession with those

[DeathAngel]

I don’t think anybody will have sympathy for them. They got into bed with Ver, sold loads of bitcoin to support their shitcoin. They deserve everything they get.

[bdbabiak77]

They are responsible for the wounding of crypto in many ways. I doubt their death would be mourned.

[franky1]

take the OCTOBER'13 hashrate rise, and THEN the market rise
take the OCTOBR'18 hashrate curve down, and THEN the market dip
there are multiple other examples over the years. but if you just want to look at the market speculative prices.. then ill save the explanation for another time when you might b ready to go beyond the basics

Let's take two arbitrary single value points and let's draw a final conclusion, ignoring a two-year continuous graph that screams otherwise.
Totally legit!

Besides, stop pulling things out of you know what!

Let's analyze the October 2018 scenario:
Between October 04 and 18 the hashrate dropped 3.65%, the price went up 0.68%.

I'm having trouble understanding who is following who when things are going in the opposite way.  

Also interesting how you managed to find as an example exactly the beginning of the hashwar between shitcash and fakeshitcash when massive amounts of hashing power were diverted to those chains. You really have an obsession with those

firstly your thinking hashrate of day X affects day X of market top price.  if you knew the basics you would know thats never gonna be the case anyway
secondly your only looking at the market from the point of view of the top prices. your not even thinking about underline value support. and it seems like something you cant get your head around.
thirdly your not actually taking the numbers and drawing your own charts.
fourthly you are not thinking about cause/reaction

i tried to give you 2 small examples and then see if ud bother doing some actual research (shows keen interest) but instead you just wanna take a 2 second glance and then form an opinion. meaning the point aint that important to you so not much point in me spending time spoon feeding you about the mining:market dynamics and the layers of value/speculation.

but it aint just me that knows of the mining:markt dynamics. it even goes back as far as hal finney talking about it in the early days of bitcoin.
and even further back in regards to other assets.
her is a little hint. cost of creation(ull learn things lik the summer 2018 mining cost:bitcoin market underlying bottomline value)

and by the way. the altcoin drama is just that. altcoin... and drama. if you bothered to check and do some resarch you would find that the altcoin drama is a later story line used as the weak excuse after thought to PRETEND to be cause of X event. purely to drum up fake fame by altcoin dramatists pretending they are influencers. when in reality thy are late to the party gatcrashers who then just want to take selfies to pretend they had a great time organising the party. rather than the reality of them being uninvited gatecrashers that are insignificant

any way. there was no massive ramp up of hashpower january2018, followed by a hashpower correction in the spring

[Wind_FURY]

That's irrelevant. The Digital Currency Group has invested in many cryptocurrency companies, that sometimes they're in competition with one another. BTCC has shut down, so what? There are others.

How old is that picture?

BtcJam? Hashplex?

It must be very old. It's showing BTCC which has already shutdown.

Given that context, the Digital Currency Group are just investing in everything that they believe has potential, like any other VC.

But franky1 is making a narrative that DCG = the Bilderberg Group.

[stompix]

<>
any way. there was no massive ramp up of hashpower january2018, followed by a hashpower correction in the spring

franky1, I keep telling you, stay away from discussion mining cause every time you end up in a bad position

2018-01-02  1931136454487
2018-01-24  2227847638503
2018-02-01  2603077300218

Yeah, 34% in a month is by no way ramp up.../s

And that sping correction, I guess that 100% increase till May was another "correction".

~

It must be very old. It's showing BTCC which has already shutdown.
Given that context, the Digital Currency Group are just investing in everything that they believe has potential, like any other VC.

Better stop posting it, not because is not irrelevant or totally outdated but I see some names there that trigger really bad memories, and probably I'm not the only one.  

[franky1]

<>
any way. there was no massive ramp up of hashpower january2018, followed by a hashpower correction in the spring

franky1, I keep telling you, stay away from discussion mining cause every time you end up in a bad position

2018-01-02  1931136454487
2018-01-24  2227847638503
2018-02-01  2603077300218

Yeah, 34% in a month is by no way ramp up.../s

And that sping correction, I guess that 100% increase till May was another "correction".

10%-15% a fortnight is not 'massive ramp up..
also the market ramped up from $5k-$20k in winter (400%)
mining didnt ramp up 400%

stompix. is was you that said hashpower followed market
so if market was
 /\
/  \_/\_/\
             \
then mining would be
   /|
_/ |__/|_/|
                \
you would see mining volitile up and down when market ups and downs. and for instance when market goes down in november. the mining would go down in november december(reactionary)
however mining has been a smooth curve up. and when mining went down in OCTOBER(BEFORE)..the market went down in november(AFTER)..

anyway. it might be worth you looking into mining costs and think about mining:market.
where by if its cheaper to mine people mine, if its cheaper to market they will market. people will always be thinking about the cheapest way to obtain bitcoin.

it might be worth you looking not at ATH market. but bottomline support/resistance. and you start to notice something.
it might be worth you investigating/researching the OTC/contract mining contracts and other things

but yea if you think looking at 2 charts where mining IS NOT following market proves your point that mining is following market.. makes no sense.

hint. dont try being a trend anal. especially when your thoughts of mining follows markets is false.. and even when you use to charts to try proving it. the charts themselves dont show a trend which you try to imply (they look nothing alike)
try technical analysis of costs of acquisition(mining:market cost)

but have a nice day

[stompix]

10%-15% a fortnight is not 'massive ramp up..

Yeah, 10%-15% isn't a big deal...
If we talk about how much nonsense you can add to a post or how many chocolate bars you can eat in an afternoon but...

That 15% in 14 days was about 3 million TH, or 200000 S9 added.
Percentage is relevant only if we talk about the same initial point, when the global hashrate will reach 100 yottahash a 1% increase would mean we would have to build a hundred nuclear reactors for that, but...meh..it's just 1%, we have seen better.

it might be worth you looking not at ATH market. but bottomline support/resistance. and you start to notice something.

It might be worth when you stop looking at a single point and follow at least one year or even better two years graph.

We had a bear market in 2014, hashrate went up
We have a bear market since 2017, hashrate is still going up

And this went on for years!!! not for a few days chosen randomly so they can fit your theory.

[franky1]

It might be worth when you stop looking at a single point and follow at least one year or even better two years graph.

We had a bear market in 2014, hashrate went up
We have a bear market since 2017, hashrate is still going up

And this went on for years!!! not for a few days chosen randomly so they can fit your theory.

your making my point for me.

YOU said that mining reacts to markets... you just disproved yourself with your own words

i have not just taken a single point.. i took 365 points of hashrate per year
calulated the mining cost

i took the points of market price BOTTOMLINES
and charted it out

and done so for multiple years. i also looked at relevant real world events that affect things.
it was YOU that just looked at 2 charts which were not based on cheapest cost of acquisition
it was you that displayed those 2 basic charts which didnt show a pattern of mining following market.
yet then you insinuated it did based on 2 charts that show the exact opposite

my chart data based on cost of acquisition went back for years with thousands of data points and calculations.

i only mentioned 2 examples just to avoid waffling. because if u were interested in researching and learning more about it. then your free to. no point in throwing out loads of data if all you wanna do is just pok the bear for social drama.

but hey
ill say it again. try to calculate the cost of mining and the bottomline price support (not the daily high market)

anyway.. thanks for your sideline off topic poke which as usual from certain people turns things away from proving a network point into just trying to poke at franky(boring pointless replies to evade actually staying ontopic)

but getting back to the topic

big pools (not basement miners) are smart to pre-plan their expansion. they even pre-contract their OTC coin sales, their costs, etc.so they are not reliant on the market price and dont follow it.