With short-seller Hindenburg Research stating that it was going short on China’s Ebang International Holdings Inc, shares of the Chinese bitcoin mining machine producer slumped by nearly 20% in early trading.
“Ebang claims to be a “leading bitcoin mining machine producer”, yet our research indicates this extraordinary claim is backed by no evidence,” said the short seller. “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.”
Ebang did not immediately respond to requests for comments.
The recent mania in mining cryptocurrencies has fueled a surge in fundraising by Chinese companies which are either seeking to expand their cryptocurrency operations or are pushing to move into the hot sector.
In June 2020, Ebang starting trading on Nasdaq and had conducted two fundraising rounds in February alone raking in $170 million.
In February, Hindenburg had gone short on another Chinese blockchain company Sos Ltd after 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 2020.