Short-seller Hindenburg takes aim at Chinese crypto firm Ebang, shares slump

REUTERS/Dado Ruvic

Short-seller Hindenburg Research said on Tuesday it had taken a short position on Ebang International Holdings Inc, sending the Chinese bitcoin mining machine producer’s shares down more than 12%.

Ebang claims to be a ‘leading bitcoin mining machine producer’, yet our research indicates this extraordinary claim is backed by no evidence,” the short-seller said.

Ebang released its final miner in May 2019 and has since seen its sales dwindle to near-zero, delivering only 6,000 total miners in 1H20.”

Short sellers sell borrowed shares in the hope of buying them back at a cheaper price and pocketing the difference.

In a statement on Wednesday, Ebang said the Hindenburg report contained many errors, unsupported speculations and inaccurate interpretations of events.

It added it intends to further review and examine the allegations and take necessary action to protect the interest of its shareholders.

The recent bitcoin mania has fueled a surge in fundraising by Chinese companies seeking to expand their cryptocurrency operations or move into the red-hot sector.

Ebang debuted on Nasdaq in June last year and had conducted two fundraising rounds in February alone, raking in $170 million, even after a previous offering in November.

Hindenburg, which went short on another Chinese blockchain company Sos Ltd in February, said its research revealed that instead of using capital proceeds to develop its business, Ebang directed much of the cash out of the company through “a series of opaque deals with insiders and questionable counterparties.”

Hindenburg had also taken short positions in electric vehicle companies including Lordstown Motors, Nikola Corp, Kandi Technologies Group Inc and insurer Clover Health in the past year.

Reuters

Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.

Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.