By Kenny S - Bitcoin Enthusiast - 09-04-2021
A Chinese Bitcoin mining company that’s listed on Nasdaq, their company’s stock massively dropped by 20% after a damning story exposed some suspected shady dealings.
The share price of Chinese Bitcoin (BTC) company Ebang has further dropped because the company denied all claims made during a Hindenburg Research study that it was stealing money from American investors.
According to the Hindenburg Research paper, Ebang is “simply the latest chapter in the ‘China Hustle’ disguised as a Bitcoin mining play.” According to the paper, Ebang raised hundreds of millions of dollars through public offerings in the United States while posing as a Bitcoin mining business.
Ebang claims to be one of the "leading Bitcoin mining machine producer,” reportedly, the company hasn't launched a new product since 2019, and its sales have been steadily declining since then.
Since the beginning of the week, the share price of NASDAQ: EBON has dropped by 20%. After opening at $6.35 on Monday, the share price had fallen to $5.00 by Tuesday's end, representing a 21% loss. Since then, the stock has recovered to $5.03, leaving weekly losses of more than 20%.
According to the Hindenburg article, Ebang saw the writing on the wall for its mining rig company, which was accused of producing inferior machines to local competitors. The company is said to have then spun itself into Ebonex, a cryptocurrency exchange platform. The initial announcement appears to have increased the EBON market cap to $922 million.
Despite having no online presence, Ebonex miraculously soared to some of the largest trade levels in the world after just a few months of operation. However, their statistics were not reported on crypto market investment websites that track statistics like CoinMarketCap or CoinGecko, and Hindenburg describes the entire incident as "just another cautionary tale for novice retail investors."
Ebang International Holdings Inc. issued an official response to the article, claiming that the study was full of speculation and unsubstantiated statements. According to the announcement, Ebang will investigate Hindenburg's allegations and take the appropriate measures to protect its investors.
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