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BIT Mining Limited Agrees to Sell its Mining Pool Business

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BIT Mining Limited (NYSE: BTCM) has agreed to sell its mining pool business operated under BTC.com to Esport – Win Limited for US$5 million, resulting in an increase of approximately US$16 million in total shareholders' equity. The Business generated revenues of US$593.2 million in 2022 but recorded a net operating loss of US$2.6 million. The sale is expected to improve profitability and strengthen the company's cash position.
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The divestiture of BIT Mining's mining pool business represents a strategic shift for the company, aimed at consolidating its financial position. By offloading a non-profitable segment that accounted for a significant portion of its revenue but also a net operating loss, BIT Mining is poised to enhance its balance sheet. The expected increase in shareholders' equity by US$16 million is a positive signal to the market, potentially leading to improved valuation multiples. However, investors should monitor the impact of losing a major revenue contributor on the company's future top-line growth.

The cryptocurrency mining sector is known for its volatility and capital-intensive nature. BIT Mining's decision to sell its mining pool business, which is a substantial part of its operations, indicates a strategic pivot towards more sustainable and potentially profitable ventures. This move could be interpreted as a response to the industry's changing dynamics, including increased competition and fluctuating cryptocurrency prices. The company's focus on R&D and exploration of new areas suggests a long-term vision to diversify and stabilize its revenue streams, which could be appealing to investors looking for growth in the evolving tech landscape.

The sale of the mining pool business operated under BTC.com is a significant event in the cryptocurrency mining industry, as it involves a major player redefining its business model. Mining pools are critical to the crypto ecosystem, as they allow individual miners to combine their computational power to increase the chances of mining blocks and receiving rewards. The fact that BIT Mining is divesting from this area could reflect underlying challenges, such as the high costs associated with mining rewards distribution and the complex management of pooled resources. The shift away from this business model may allow BIT Mining to allocate resources more efficiently and reduce liabilities associated with cryptocurrency fluctuations.

AKRON, Ohio, Dec. 29, 2023 /PRNewswire/ -- BIT Mining Limited (NYSE: BTCM) ("BIT Mining," "the Company," "we," "us," or "our company"), a leading technology-driven cryptocurrency mining company, today announced that it has agreed to sell its entire mining pool business operated under BTC.com (the "Business") to Esport – Win Limited, a Hong Kong limited liability company, for a total consideration of US$5 million. The sale of the Business is expected to result in an increase of approximately US$16 million in the total shareholders' equity of BIT Mining, since the Business has approximately US$11 million in cryptocurrency net liability. The sale does not include or affect any of BIT Mining's other businesses.

The sale of the Business is subject to certain closing conditions and applicable regulatory approvals and is expected to close upon satisfaction of the closing conditions.

The Business generated revenues of US$593.2 million, or 91.2% of BIT Mining's total revenues, in the year ended December 31, 2022. However, in accordance with the Company's business model, a considerable amount of mining rewards is payable to each pool participant in exchange for the computing power they contribute to the mining pool. As disclosed in the Company's annual report on Form 20-F for the fiscal year ended December 31, 2022, the cost and expense of mining pool services for the full year 2022 was US$595.8 million. Consequently, the Business recorded a full-year net operating loss of US$2.6 million. The Company expects the sale to result in improved profitability and a solid cash position.

Xianfeng Yang, Chief Executive Officer of BIT Mining, commented, "By selling the loss-making mining pool business, we will be more resilient with our core resources focused on advancing the research and development of our existing businesses. Meanwhile, the cash proceeds from the transaction and our company's enhanced profitability outlook will further strengthen our position to explore new areas with greater potential and room for future expansion. Moving forward, we will strive to unlock considerable synergistic potential across our existing business segments, propelling our company's technology-driven growth and creating long-term value for our shareholders."

About BIT Mining Limited

BIT Mining (NYSE: BTCM) is a leading technology-driven cryptocurrency mining company with operations in cryptocurrency mining, data center operation and mining machine manufacturing. The Company is strategically creating long-term value across the industry with its cryptocurrency ecosystem. Anchored by its cost-efficient data centers that strengthen its profitability with steady cash flow, the Company also conducts self-mining operations that enhance its marketplace resilience by leveraging self-developed and purchased mining machines to seamlessly adapt to dynamic cryptocurrency pricing. The Company also owns 7-nanometer BTC chips and has strong capabilities in the development of LTC/DOGE miners and ETC miners.

Forward-Looking Statements

This news release contains forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended, and as defined in the U.S. Private Securities Litigation Reform Act of 1995. These forward-looking statements can be identified by terminology such as "will," "expects," "anticipates," "future," "intends," "plans," "believes," "estimates," "target," "going forward," "outlook" and similar statements. Such statements are based upon management's current expectations and current market and operating conditions and relate to events that involve known or unknown risks, uncertainties and other factors, all of which are difficult to predict and many of which are beyond the Company's control, which may cause the Company's actual results, performance or achievements to differ materially from those in the forward-looking statements. Important factors that could cause BIT Mining's actual results to differ materially from those indicated in the forward-looking statements. Further information regarding these and other risks, uncertainties or factors is included in the Company's filings with the U.S. Securities and Exchange Commission. The Company does not undertake any obligation to update any forward-looking statement as a result of new information, future events or otherwise, except as required under law.

For more information:

BIT Mining Limited
ir@btcm.group
ir.btcm.group 
www.btcm.group 

Piacente Financial Communications
Brandi Piacente
Tel: +1 (212) 481-2050
Email: BITMining@thepiacentegroup.com 

Cision View original content:https://www.prnewswire.com/news-releases/bit-mining-limited-agrees-to-sell-its-mining-pool-business-302023810.html

SOURCE BIT Mining Limited

FAQ

What is BIT Mining Limited's ticker symbol?

BIT Mining Limited's ticker symbol is BTCM.

How much is BIT Mining Limited selling its mining pool business for?

BIT Mining Limited is selling its mining pool business for US$5 million.

What was the net operating loss of the Business in 2022?

The Business recorded a net operating loss of US$2.6 million in 2022.

What is the expected impact of the sale on BIT Mining Limited's profitability?

The sale is expected to result in improved profitability for BIT Mining Limited.

Who is the buyer of BIT Mining Limited's mining pool business?

Esport – Win Limited, a Hong Kong limited liability company, is the buyer of BIT Mining Limited's mining pool business.

BIT Mining Limited

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