Bitmain Posts $500 Million Loss for Q3 2018
Cryptocurrency mining hardware maker Bitmain reported losses to the tune of $500 million during the third quarter of 2018 due to the massive slump in the crypto market.
Filing Financial Results with the HKEx
The Beijing-based mining giant had to file an update on its quarterly performance results with the Hong Kong Stock Exchange (HKEx) as part of its application for an IPO (Initial Public Offering). Bitmain had first applied to be listed on the exchange in September 2018.
The filing was not made public, however, according to internal sources, the filing reported that Bitmain generated profits of $500 million for the first 9 months of last year. The same sources also stated that profits were generated on revenues of just above $3 billion.
What was made public by Bitmain earlier was that the company had made profits of about $1 billion in the first 6 months of 2018. If that amount were to be subtracted from the $500 million profit that the mining equipment giant reported to the HKEx this time, it would mean that Bitmain actually saw losses of about $500 million in Q3 of 2018.
Added to that, Bitmain, in its previously published earnings report, had stated that it had garnered revenues of $2.8 billion in the first 6 months of 2018. Therefore, if the total revenues of $3 billion for the first 9 months of last year were subtracted from that amount, it would mean that the company only saw revenues of about $200 million in the third quarter.
According to the rules of the HKEx, a company should not be more than 6 months behind on its financial reporting to be listed. Which is why Bitmain only provided its Q3 results to the exchange, rather than its Q4 financial performance.
However, the financial report submitted by the company also showed that its cryptocurrency holdings’ value had declined from $800 million in June 2018, to less than $700 million by the end of Q3.
Dire Straits for the Mining Giant
These numbers are the first time that concrete figures have been put around how much the cryptocurrency hardware maker is struggling due to the crypto winter.
While Bitmain declined to comment about these numbers, there were already indications that the company was struggling. The crypto-mining giant had already closed many of its branches across the world and had laid off a large number of its staff.