Ebang International (NASDAQ:EBON) stock is gaining in intraday trading today after closing a $70 million stock offering yesterday. EBON stock was up a little more than 7% for the day at the time of writing.
Ebang, which primarily sells Bitcoin (CCC:BTC) mining machines, is the latest beneficiary of increased investor interest in cryptocurrencies. As BTC rallies past $50,000 and other altcoins flirt with all-time highs, there has been a flood of investor and institutional money flowing into cryptocurrencies, which is great news for a company selling the “picks and shovels” of our modern gold rush.
Ebang’s stock offering, which closed yesterday, placed approximately 14 million units at a price of $5 per unit, with each good for 1 Class A share and a warrant to purchase a half-share of Class A stock at $5.25 per share.
EBON also announced yesterday it would be moving into bitcoin mining, as well as investing in data center construction to support BTC mining. In a press release, Chairman and CEO Dong Hu said the move would, “help the Company’s transformation from a hardware manufacturer to a blockchain company.”
But while CEO Hu was bullish about the mining operation’s ability to “increase … revenue in [the company’s] cryptocurrency business,” the press release itself cautioned investors against putting too much faith in this portion of the business, saying:
“There is no guarantee that the Company’s operation of Bitcoin mining business will commence as planned or at all, or that such business operation will improve the Company’s financial performance or results of operation.”
Trading volume in EBON stock was significantly up, at more than 117 million trades on the day, compared with an average daily volume of just under 8.6 million.
On the date of publication, Vivian Medithi did not have (either directly or indirectly) any positions in the securities mentioned in this article.