Jihan Wu, the co-founder of Bitmain who owns 20.25% of the company’s shares and a personal net worth in excess of USD 2 billion, has stepped down from his role as director. Now Wu is a supervisor, meaning he can discuss business decisions with the Board of Directors but cannot directly vote on business decisions.
Wu’s change of position coincides with a larger reshuffling of the Bitmain Board of Directors. Zhao Yifeng, Ge Yuezhen, Zhou Feng, and others have also stepped down from being directors. Further, Hu Yi retired from the Board of Supervisors. Meanwhile, Jank Group, Bitmain’s corporate lawyer, has been promoted to executive director.
The exact reasons for this reshuffling remain undisclosed but it is speculated that they are related to the Bitcoin Cash (BCH) fork coming on 15 November 2018 since Bitmain has strongly backed BCH. Previously, Bitmain liquidated large amounts of its Bitcoin holdings to buy BCH at USD 900, and have seen 40% losses as of November 2018. Now tensions are running higher than ever since the Bitcoin fork is now itselt splitting into different versions. Indeed, Wu’s Twitter is filled with controversial posts regarding BCH.
It is also possible that the reshuffling is related to the upcoming Bitmain initial public offering (IPO) on the Hong Kong stock exchange. Bitmain is aiming for a USD 18 billion IPO after a USD 1 billion funding round juiced its valuation to USD 15 billion. If this does occur it will be the largest cryptocurrency related IPO in history. Bitmain is the largest manufacturer of cryptocurrency mining equipment. In the first half of 2018, Bitmain sold USD 2.684 billion of mining equipment.
The IPO application process does not come at an ideal time, with Bitcoin’s network hash rate plateauing for the first time in years, which means there is less demand for new mining equipment. However, Bitmain continues to be on the cutting edge of the cryptocurrency mining industry with the release of 7 nm chips that claim to have the highest mining efficiency in the world at 0.042 W/GH. Apparently, the first wave of these sold out rapidly.
According to research, it is common for a firm that is undergoing an IPO to restructure, in order to better negotiate the institutionalized process an IPO requires.
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