Ebang Shares Plunge 15% After Experts Recommend Selling Them
Main page News, China, Mining

The shares of Chinese mining device maker Ebang have fallen by 14.8% (between April 6 and 7) after analysts at Hindenburg Research published a report recommending "taking short positions" in the shares.

The experts claim Ebang has misled investors in relation to investment allocation.

The report suggests that of the $374M raised through four offerings after the company's IPO, Ebang used $103M to buy shares of underwriter AMTD Group, which has a dubious reputation. Of this amount, 21 million was used to repay loans obtained by a relative of the company's founder.

Representatives of Hindenburg Research also say Ebang's sales have slowed to near-zero. Thus, during the first half of 2020, the company delivered 6,000 mining devices.

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In addition, the analysts believe the recent launch of crypto exchange Ebonex.io is nothing more than a distraction.

Analysts say Ebang is a good example for following the caveat emptor rule, according to which it is necessary to conduct proper analysis before buying shares.

At the same time, Ebang has said Hindenburg Research's claims are unfounded:

"The report contains many errors, unsupported speculations and inaccurate interpretations of events. The company will take whatever necessary and appropriate actions may be required to protect the interest of its shareholders."

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