Ebang dives into China Crypto Group’s short Hindenburg research
Ebang International (EBON) – Get the report from EBANG INTERNATIONAL HOLDINGS, INC. Shares plunged on Tuesday after analysts at Hindenburg Research, a well-known short seller, accused the China-based cryptocurrency group of illicitly using capital raised from U.S. investors.
Hindenburg, who said he had a short position in Ebang, said the group had invested $ 103 million – most of which was raised when it went public in June 2020 – in “bond purchases linked to AMTD (International) “, a Hong Kong-based company. underwriter, and an additional $ 21 million to “repay loans between parties related to the relative of Ebang Chairman and CEO, Dong Hu.”
Ebang’s recently launched cryptocurrency exchange, Ebonex, reports what appear to be “fictitious volumes,” Hindenburg said, implying that it is one of the largest spot exchanges in the world. ” despite the lack of an online presence “.
Ebang International officials were not immediately available for comment when they were first contacted by TheStreet.
“Ebang is another uplifting tale for inexperienced retail investors who are excited about all things crypto,” said Hindenburg. “As is so common with other ridiculous China-based programs, the company will likely continue to sell shares as long as investors are ready to buy them. We believe this is a one-way street. and that the capital does not come back. “
Ebang shares fell 18% in pre-market trading on Tuesday to change hands to $ 5.22 each. The shares were trading up to $ 14.95 each earlier this year.
China-based companies raised nearly $ 12 billion in IPOs in the United States last year, according to data compiled by Renaissance Capital, the highest number since 2014, as companies rushed to the market before rule changes under the Holding Foreign Companies Accountable Act (HFCA) which require US authorities to review the audit records of foreign companies prior to registration.