Everybody in the financial world is at Davos this week for the World Economic Forum (WEF). Guest speakers included the Head of the Hong Kong Stock Exchange (HKEX) who addressed the conference about the confusion over Bitmain’s application for an IPO. Bitmain is a giant in the bitcoin mining world.
Charles Li Xiaojia, CEO of the Hong Kong exchange said that it was important that IPO candidates were consistent with regard to their business offerings. The South China Morning Post (SMP) reported him as saying, “If a company made billions of US dollars through Business A, but suddenly said it will do Business B without showing any performance, or said Business B is better, then I don’t think the Business A featured in their application will be sustainable.”
He added a further comment to this: “Besides, if regulators were hands off [on Business A] in the past but will regulate it in the future, will you be able to continue the business and still make money from it?” Although journalists present at the event questioned him specifically about Bitmain’s application, he refused to directly answer their questions, keeping his comments general.
Last year Bitmain made the majority of its revenue from mining hardware sales, however, the so-called ‘crypto winter’ has put a dent in its profits, as it has for many mining operations. The company also made announcements about going into the Artificial Intelligence (AI) market due to China’s scrutiny of the crypto industries. It also announced its plans for an IPO, however, at this point, its finances suggested that Bitmain is in some trouble and rumours started to circulate that no regulator would allow a cryptocurrency-based IPO to go ahead.
Charles Li Xiaojia’s remarks at Davos suggest that HKEX is feeling rather cool about the idea of a Bitmain IPO, given that Bitmain appears to be a company switching from one type of business to another.