Bitcoin mining rig manufacturer, Bitmain, reportedly made losses of $625 million in the first two months of 2019. However, it has high hopes for a turnaround based on demand for new 7nm mining machines.
A Bad Start to the Year
According to a report from a Chinese news outlet, Bitmain’s total operating income for Q1 was $1.082 billion dollars, with revenues split over the three months as $253 million, $253 million, and $579 million (respectively).
January and February saw losses of $345 million and $280 million, although in March the company posted a profit of $315 million. Still, a $310 million loss over Q1 is not a good look.
Reportedly, the loss was down to the offloading of outdated 16nm mining rig inventory at low prices.
New Tech To Change Bitmain Fortunes
Despite Q1 losses, Bitmain expects a strong performance in H2, once its old stock has been cleared and the company starts selling its new 7nm machines. Bitmain has allegedly placed a large order for 7nm chips from Taiwan Semiconductor Manufacturing Company (TSMC), with a lead time of 3 to 4 months.
It expects cash flow to steadily increase in Q3 as advanced orders for the new machines come in, and then see explosive growth in earnings after the first 7nm rigs start to ship.
It also anticipates a growth in profits on its artificial intelligence (AI) line of products.
Better Results To Boost IPO
Bitmain will need to post some better results if it is to attract investors to its beleaguered IPO. The company has allegedly revived its IPO plans in the US, after the original filing in Hong Kong lapsed.
Bitmain had a somewhat disastrous year in 2018 as prices fell across cryptocurrency markets, and it took an ill-advised gamble on Bitcoin Cash. This was considered by many to be good news for Bitcoin as mining became more decentralised and Bitmain’s mining dominance dropped.
The upturn in the fortunes of Bitcoin have also helped Bitmain in its recovery, with some sources claiming that staff options have been already been completed, ahead of the revived IPO, which is now imminent.
Do you think 2019 will be the year for Bitmain? Let us know your thoughts in the comment section below!
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