BIT Mining Limited Completes Sale of its Mining Pool Business

Rhea-AI Summary

BIT Mining Limited (BTCM) has closed the sale of its mining pool business to Esport – Win Limited for $5 million, resulting in a $19 million increase in shareholders' equity. The CEO sees this as a positive move towards sustainable growth.

Insights

Financial Analyst

The disposal of BIT Mining's mining pool business to Esport – Win Limited for US$5 million indicates a strategic shift for the company. The transaction's impact on BIT Mining's balance sheet is significant, as it turns a US$17 million net liability into an increase of approximately US$19 million in total shareholders' equity. This implies a substantial improvement in the company's financial health, potentially leading to a revaluation of the stock by the market.

Investors should note that the retention of 71.37 bitcoins for compliance and safety purposes at a fair value of US$3 million reflects a conservative approach to the transaction, providing a cushion against the volatility inherent in cryptocurrency valuations. The transaction's timing and the choice of retaining a portion of payment in bitcoins rather than fiat currency could influence BIT Mining's exposure to bitcoin price fluctuations, which investors must consider when assessing the company's risk profile post-transaction.

Market Research Analyst

BIT Mining's decision to sell its mining pool business and focus on its remaining units suggests a potential pivot in its core business strategy. This move could resonate positively with investors looking for companies with a clear direction and operational focus. By streamlining operations, BIT Mining could enhance efficiency and allocate resources more effectively towards profitable segments, which may contribute to long-term sustainable growth as highlighted by CEO Xianfeng Yang.

The cryptocurrency mining industry is highly competitive and sensitive to regulatory changes, technological advancements and crypto market dynamics. BIT Mining's realignment could be a response to such external pressures, aiming to optimize its position within the market. Investors may view this strategic refinement as an adaptive measure that could safeguard the company against future industry challenges.

Cryptocurrency Expert

The valuation of the retained bitcoins at US$42,034.57 each reflects the volatile nature of cryptocurrency markets. This valuation plays a crucial role in the accounting treatment of the transaction and the resulting financial statement impact. Stakeholders should consider the implications of bitcoin's price volatility on the company's future financials, as a significant price movement could materially affect the reported value of these assets.

Furthermore, the shift away from the mining pool business could indicate BIT Mining's strategic response to the evolving landscape of cryptocurrency mining, where consolidation, regulatory scrutiny and energy consumption concerns are prevalent. This realignment might be an effort to navigate these complexities by focusing on potentially more stable and profitable areas of the cryptocurrency ecosystem.

AKRON, Ohio, March 4, 2024 /PRNewswire/ -- BIT Mining Limited (NYSE: BTCM) ("BIT Mining," "the Company," "we," "us," or "our company"), a leading technology-driven cryptocurrency mining company, today announced the closing and completion of its previously announced sale of 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 "Consideration"). The Business has been transferred to Esport – Win Limited. While the closing of the transaction occurred on February 29, 2024, for accounting purposes the Business was deemed to be disposed of on January 31, 2024 when the Company relinquished control and received the first payment of the Consideration by retaining 71.37 bitcoins of the Business for compliance and safety purposes when transferring the Business to Esport – Win Limited. The retained bitcoins have a fair value of US$3 million as determined using US$42,034.57 per bitcoin, which was published by Coinbase.com on January 29, 2024 at UTC 0:00.

As the transferred Business had approximately US$17 million in net liability as of January 31, 2024, the sale of the Business will result in an increase of approximately US$19 million in the total shareholders' equity of BIT Mining.

Xianfeng Yang, Chief Executive Officer of BIT Mining, commented, "The successful completion of this transformative transaction represents a pivotal milestone for BIT Mining, enabling the Company to heighten our focus on our remaining business units with a streamlined approach. I am confident that our strengthened financial position and improved profitability will empower us to further pursue long-term and sustainable growth."

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

View original content:https://www.prnewswire.com/news-releases/bit-mining-limited-completes-sale-of-its-mining-pool-business-302078426.html

SOURCE BIT Mining Limited

FAQ

What was the total consideration for the sale of BIT Mining's mining pool business?

The total consideration for the sale was $5 million.

When was the Business deemed to be disposed of for accounting purposes?

The Business was deemed to be disposed of on January 31, 2024.

What was the fair value of the retained bitcoins?

The fair value of the retained bitcoins was $3 million, determined using $42,034.57 per bitcoin.

How much will the sale of the Business increase in the total shareholders' equity of BIT Mining?

The sale of the Business will result in an increase of approximately $19 million in the total shareholders' equity of BIT Mining.

Who commented on the completion of the sale transaction?

Xianfeng Yang, the Chief Executive Officer of BIT Mining, commented on the completion of the sale transaction.