The so-called “Crypto Winter” put a massive dent on Bitmain as the company lost around $500 million in the third quarter of 2018, claims a Coindesk report.
Although the Bitcoin miner manufacturer did not disclose any official figures for the loss, Coindesk estimated the numbers based on various financial reports published by the company on various domains.
According to a recently filed financial report by Bitmain to the Hong Kong Stock Exchange (HKEx) for the application of initial public offering (IPO), the company disclosed that it had earned around $500 million in the first nine months of last year and the total revenue for the period went slightly over $3 billion. The filing, however, did not display quarterly numbers, as per Coindesk.
In a previous public report, the Bejing-based manufacturer disclosed that it grossed profits of $1 billion in the first half of 2018. A quick comparison of this half-yearly figure with the nine-months’ profit reported to HKEx clearly shows that in the third quarter of 2018, Bitmain endured a loss of half-a-million dollars.
Moreover, a massive revenue drop in the same quarter can also be seen as according to the half-yearly report the revenue of the firm is $2.8 billion – the firm added only $200 million as revenue in the next quarter.
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According to Coindesk, the Chinese hardware manufacturer also significantly lost its crypto holdings as the figures in the documents show that in the same quarter its crypto portfolio went down by $100 million – the half-yearly report shows the figure to be $800 million whereas nine-month financial report to HKEx put it at $700 million.
Lay-Offs to Follow
Some tough business decisions of Bitmain also reflect the company’s degrading performance fueled by the bear market. Finance Magnates earlier reported that the company is planning to lay off 50 percent of its workforce in the coming months.
It has already closed its Israel office last December and laid-off all 24 employees of the office, including the branch head.
Expanding Products Line Before IPO
Bitmain, however, is trying to expand its market share ahead of its IPO as it recently launched a seven nanometer ASIC mining chip dedicated to mine cryptocurrencies using the SHA256 algorithm for their proof-of-work (PoW) – notably Bitcoin and Bitcoin Cash.
Though the company is pushing hard to list itself on HKEx, the exchange is skeptical about the sustainability of cryptocurrency-related businesses.