Bitmain quietly files for US IPO amid internal power struggles

Crypto mining equipment manufacturer Bitmain has reportedly refiled its application for an initial public offering (IPO) in the United States, after hopes of an initial bid were dashed earlier this year. Tencent News reported that the mining giant has secretly filed an application with the U.S. Securities and Exchange Commission (SEC), sponsored by Deutsche Bank, as part of a deal that would see the company’s equity offered to investors in the U.S. for the first time.

The valuation remains unclear, though earlier reports suggested it could be looking to raise in the region of $300-$500 million from the offering. The figure is significantly lower than the $3 billion it had set as its target for an initial IPO application in Hong Kong filed back in September 2018, with the application ultimately lapsing in March of this year.

The news comes in the same week that Bitmain saw the return of one of its former executives overthrowing the exiting management team, amid concerns about the long-term prospects of the business.

The news emerged in an email sent to staff which was leaked to local press this week, in which executive Jihan Wu announced he had dismissed Micree Keutan Zhan from any further role within the company.

According to the email, staff at Bitmain were informed they were no longer permitted to deal with Zhan, or to follow any direction or instruction from the former executive.

Bitmain’s co-founder, chairman, legal representative and executive director Jihan Wu has decided to dismiss all roles of Keutan Zhan, effective immediately. Any Bitmain staff shall no longer take direction form Zhan, or participate in any meeting organized by Zhan. Bitmain may, based on the situation, consider terminating employment contracts of those who violate this note.

Meanwhile, CoinDesk has gotten ahold of a partial transcript of a Bitmain internal meeting, which revealed “an ugly power struggle” that resulted in Zhan’s ouster. During the emergency meeting, Wu—now the chairman of Bitmain and executive director of its Beijing subsidiary—confirmed to staff that Zhan was dismissed from all his roles, saying, “Zhan escalated what should be a disagreement on an ordinary company business decision to the level of power struggle.”

In December 2018, Wu and Bitmain’s three other founding members pushed for layoffs to reportedly save the company. Zhan resisted and tried to rally other executives against the plan, but found out that majority of management supported it. Undeterred, Zhan reportedly called a meeting where he “threatened to void stock-option incentives” for those who wouldn’t back him up in his bid to become the sole Bitmain CEO. That attempt also failed, but Wu and Zhan agreed to step down as co-CEOs.

The power struggle, however, had resulted in “serious divisions” in the company and also “spooked Bitmain’s trading partners.”

Wu was quoted saying, “Some said inside the company, I’m the one who handles business and Zhan handles technology. I want to ask, between Zhan and I, who really has a love for the technology? Zhan doesn’t love technology, he loves that feeling of fulfilling his endless desire for power. He doesn’t love technology, he loves vanity. Folks, we have no options but to keep Zhan away from this company.”