Coinbase fell below the issue price, Meitu lost more than 10 million yuan, and Tesla’s assets were impaired by more than US$100 million.
Original title: “The latest status of cryptocurrency stocks: U.S. and China stocks fell 40%, Coinbase fell below the issue price, Meitu Tesla invested a loss”
Written by: Ivans
As of press time, the price of a Bitcoin is approximately $40,000. In sharp contrast, in April this year, Bitcoin once hit a record high of $64,374. Similar to the currency market, there are also related cryptocurrency concept stocks. For example, Coinbase has fallen below the issuance price of 250 US dollars from 400 US dollars when it first went public in early April.
Since Tesla CEO Musk called to stop buying cars with Bitcoin on May 13, the currency market and related industries seem to have begun to decline.
However, the price of the currency has not yet recovered, and just recently, Bitcoin has ushered in China’s regulatory upgrade. On the evening of Friday, May 21, the Financial Stability and Development Committee of the State Council held its 51st meeting, which pointed out that it requires cracking down on Bitcoin mining and trading activities and resolutely preventing the transmission of individual risks to the social field.
How much impact will the shrinking currency price and heavy supervision have on related concept stocks?
U.S. and Chinese stocks have fallen by more than 40% on average, and most mines are operating with temporary policies
If the regulatory policy is implemented, the relevant domestic cryptocurrency industry, especially upstream companies involved in mining, will be the first to bear the brunt.
Among the domestic concept stocks listed in the United States, those involved in the upstream business of cryptocurrency include Bit Digital Inc (Yuandian Niu Finance), Bit Mining (formerly 500 Lottery Network), Ebang International, Canaan Technology, China Global Shipping, and the Ninth City Wait. Counting from the day when Bitcoin hit a record high in mid-April, these concept stocks have fallen by more than 40% so far.
Cryptocurrency general stock market 4.14-5.25 Source: Gyro Finance
Before the policy is issued, most mines are still operating normally.
A person in charge of a Bitcoin mining pool said, “Most of the mines are located in Sichuan and Inner Mongolia. Sichuan is mostly hydropower, which is relatively clean energy. A lot of water resources are actually wasted. Therefore, everyone is not worried; but Inner Mongolia burns coal. Yes, so what everyone is worried about now is whether environmental protection actions will restrict mining.”
It is reported that on May 18, the Inner Mongolia Autonomous Region Development and Reform Commission and the Inner Mongolia Autonomous Region Energy Consumption Dual Control Emergency Command Office re-issued the “Announcement on the Establishment of a Virtual Currency “Mining” Enterprise Reporting Platform”. Established a virtual currency “mining” corporate reporting platform to fully accept complaints and reports about virtual currency “mining” corporate issues. According to the announcement, the target of the report is mainly virtual currency “mining” companies (including other hidden forms of “mining” companies and entities); virtual currency “mining” disguised as data centers that enjoy preferential policies in terms of tax, land, and electricity prices “Enterprises; companies that provide services such as site leasing for companies engaged in virtual currency “mining”; companies that obtain electricity through illegal means and engage in virtual currency “mining” business.
In Sichuan, although the local government has not issued relevant policies to restrict mining, and it has entered a high water period in May, the mining pools are limited by power outages.
On May 14, the State Grid Sichuan Abazhou Electric Power Co., Ltd. once issued a notice of power cuts. The notice shows that since May, the electricity load of the Sichuan power grid has continued to grow at a high speed, coupled with the lack of incoming water, the shortage of electric coal supply, and the severe form of power supply. After research by relevant provincial departments, it is planned to implement temporary all-day power rationing for all big data users in the hydropower consumption demonstration area from May 16th, and the recovery time will be notified separately according to supply and demand.
It is worth mentioning that of the three mines currently operated by Lotto Mutual Entertainment, a subsidiary of China-based Bit Mining, two of them are in Sichuan.
What is more noteworthy is that many of the above-mentioned Chinese concept stock companies have been transforming into the trend of cryptocurrency starting this year, especially companies that focus on mining.
Coinbase has fallen below the issue price and plans to issue bonds to raise 1.25 billion
In addition to domestic mining companies being affected by policies, the currency market is weak, and the situation of overseas companies is not optimistic. Coinbase, the largest U.S. cryptocurrency exchange that went public recently, has fallen below its offering price and has repeatedly hit new lows.
On May 17th, Eastern Time, Coinbase fell below the issuance price of $250 for the first time. It almost fell below the $200 mark on May 19. As of press time, Coinbase’s latest share price is reported at $225.3.
Not long ago, Coinbase officially announced the first quarter of 2021 financial report. Although the financial report reached the expected level, it did not bring much market response, because the company had announced its initial results earlier.
Just two days after Coinbase fell below the issue price, on May 19, Coinbase announced plans to issue US$1.25 billion convertible bonds due in 2026. Coinbase also expects to provide initial purchasers of notes with a 30-day option to purchase notes with an additional principal of up to $187.5 million to cover the over-allotment. These notes will be unsecured debts that Coinbase prefers to pay. Interest will be paid semiannually and will expire on June 1, 2026, unless they are repurchased, redeemed or converted in advance.
Coinbase introduced that this fundraising is mainly to strengthen the company’s balance sheet, and the net proceeds will be used to meet general corporate purposes, which may include working capital and capital expenditures.
However, Coinbase had a very high valuation and sufficient cash reserves before the listing. This bond issuance and financing was incompatible with the situation disclosed before the listing, and it happened shortly after the company fell below the issue price. This market is quite A period of anxiety.
Meitu’s currency speculation lost more than 10 million yuan, and Tesla’s assets were impaired by more than 100 million
With the collapse of cryptocurrencies, some companies that profited from the “speculation of coins” in the early stage began to experience floating losses, and the company’s stock prices were implicated, including Meitu and Tesla.
Meitu has announced three high-profile purchases of cryptocurrencies this year. On April 9th, Meitu announced on the Hong Kong Stock Exchange that the company purchased 10 million U.S. dollars worth of Bitcoin in the name of a wholly-owned subsidiary. So far, the company’s investment in cryptocurrency The total has reached 100 million US dollars.
The first purchase on March 7th: 379 Bitcoins at a purchase price of 47,214 US dollars; 15,000 Ethereums at a purchase price of 1,473 US dollars; the second purchase on March 17: 386 Bitcoins at a purchase price of 55946 US dollars; 16000 Ethereum, the purchase price is 1775 US dollars; the third purchase on April 8th: 175 Bitcoins, the average purchase price is 56922 US dollars.
If Meitu did not lighten its position during the period, then currently holding more than 940 bitcoins, the average buying price is about 52610 US dollars; holding 31,000 Ethereum, the average buying price is about 1629 US dollars.
According to the real-time market data of coindesk, the price of Bitcoin is stable at around 35,000 yuan, so the Bitcoin held by Meitu loses USD 16.55 million. The highest Bitcoin in history reached 63,346 US dollars, so Meitu made a profit of 10.09 million US dollars at one time. At present, Ethereum has not fallen below the purchase price of Meitu, with a profit of approximately US$14.6 million.
As of press time, Meitu’s share price is at 2.03 Hong Kong dollars, which has plummeted by more than 50% since this year’s high.
In addition, the Bitcoin invested by Tesla under the leadership of Musk, the leader of the “coin speculation”, may also lose money.
According to calculations by the well-known financial website Barron’s on the 23rd, Tesla’s Bitcoin investment book has fallen into a loss. The report pointed out that Tesla announced a $1.5 billion bitcoin investment position on February 8, when the quoted price was about $38,000. On January 27, Tesla held a 2020 fourth quarter earnings conference call (the bitcoin was not disclosed at the time). Position) As of February 8, the average price of Bitcoin was $36,700.
According to Barron’s average price calculation, Tesla is likely to hold about 42,000 bitcoins at the end of Q1. However, the recent quotation has collapsed and asset impairment losses have reached approximately 125 million U.S. dollars. According to the report, unless Bitcoin can rebound all the way to the end of June from now on, Tesla may have to recognize Bitcoin-related asset impairments when it announces its Q2 earnings report in July.
On May 19, Tesla’s stock price approached its lowest point of $539 this year, but the stock price has recovered recently. As of press time, Tesla’s share price was reported at $606.44.
to sum up
Recently, there have been many bad news about cryptocurrency. Obviously, domestic “mining circle” companies have been most affected. Because many companies’ original main business has declined, they have been transforming to the trend of cryptocurrency this year, especially the Chinese concept stock companies with mining as their main business. Once the country begins to ban mining, the costs these companies have invested in the encryption industry will be in vain. Companies in the “currency circle” that mainly buy currency will mainly affect investment and asset reserves, and the results of the impact may be reflected in the next financial reporting season.
