The past and present of the CEO dismissed from get out of class, stocks being short-sold, and Bit Digital's transition to mining
Editor's Note: This article comes fromBlock beats BlockBeats (ID: BlockBeats), reprinted by Odaily with authorization.
Editor's Note: This article comes from
Block beats BlockBeats (ID: BlockBeats)
Block beats BlockBeats (ID: BlockBeats)
, reprinted by Odaily with authorization.
This is a story about "China's No. 1 Auto Loan Company" on the verge of delisting. The actual controller was "red notice" and then tried to save himself and return, but he couldn't escape the doubts from the outside world.
On February 4, the management of the NASDAQ-listed company Bit Digital (formerly known as Dianniu Finance) suffered a "big change". The chairman of the board, the CEO and the CSO announced their resignations one after another. The reasons given by the company were "health reasons", "Not involved in the company's mining business."
In addition to internal strife, there are also foreign troubles. J Capital Research, a well-known short-selling agency in the United States, has also targeted Bit Digital. At the beginning of this year, the agency released a short-selling report, pointing out that Bit Digital’s investment of tens of millions of dollars to enter the cryptocurrency business was a scam.
Is buying a mining machine a fake, and raising funds to cash out is true? This listed company Bit Digital, which started from the P2P boom, was on the verge of bankruptcy, was finally cleaned up, and then changed its name to make a comeback. What has happened?
The top executives were suddenly "exchanged", and investors sued collectively
On February 4, 2021, the management of Bit Digital, a Nasdaq-listed mining company, suddenly underwent a "big change". Its board of directors announced that it had removed Min Hu as CEO, and CFO Erke Huang took over as CEO. In addition, the company's chairman of the board, Ping Liu, has resigned due to "health reasons", and another board member, Zhaohui Deng, will be appointed as chairman.
This is not over yet, "Yu Hong", the most well-known figure in the cryptocurrency circle within the company, has also resigned from the position of Bit Digital's chief strategy officer and director. For this series of high-level "turmoil", Bit Digital did not give more explanations, but only said about the dismissal of CEO Min Hu: "He did not participate in the company's mining business."
So what caused such a huge "shock" in Bit Digital's top management? Everything stems from that short report.
On January 13, 2021, J Capital Research released a report on shorting Bit Digital. According to the report, after investigation, it was found that Bit Digital's filing documents showing that it operated nearly 23,000 bitcoin mining machines in China was a "lie". J Capital Research asked the seller of the mining machine, and the other party denied any business connection with Bit Digital. Bit Digital was also portrayed in the report as a company operating a “false bitcoin business.”
As soon as the report came out, Bit Digital's stock price quickly plummeted by 25%. To minimize the impact, the company had to respond.
On January 19, Bit Digital announced that its bitcoin mining business is developing well. The company actually owns 40,865 mining machines. The bitcoin mining business can be verified by third-party mining pools HuobiPool and AntPool, and the auditors have verified on-site . In addition, the announcement disclosed that Bit Digital has earned a total of 1,331.2 bitcoins in 2020.
The response did little to quell investor anger, though. At the end of January, some investors filed a class action lawsuit in the U.S. Southern District Court of New York, questioning Bit Digital’s “positive statements about the company’s business, operations, and prospects that were materially misleading and/or lacking reasonable basis.” It didn’t take long for Bit Digital to report that There was a shocking news of the collective resignation of the top management.
Bit Digital was formerly known as Golden Bull Limited, and its Chinese name is Dianniu Finance.
The picture comes from the Internet
Dianniu Finance was established on November 17, 2015. Its main business is to provide loans to borrowers secured by automobiles. On March 20, 2018, Dianniu Finance was listed on Nasdaq with the stock code "DNJR".
At that time, relying on the title of "China's first car loan stock", the listing of Dianniu Financial attracted a lot of attention. The opening price on the first day was 5.2 US dollars, and the highest price reached 13.55 US dollars per share. The market value once exceeded 200 million US dollars.
image description
The picture comes from the Internet
On July 21, 2019, Dianniu Finance suddenly reported that it had moved and was suspected of losing contact. Then, on October 24, the Shanghai Pudong Public Security Bureau announced that on July 31, 2019, Dianniu Finance was suspected of illegally absorbing public deposits for investigation, and 17 criminal suspects involved in the case were taken criminal coercive measures.
However, on October 31, 2019, just one week after the notification of the filing, Dianniu Finance issued an announcement saying that the company’s former chairman and CEO Zeng Erxin, the CFO was calm, and director Liu Xiaohui was dismissed by the board of directors. In addition, the announcement mentioned that Dianniu Finance will terminate the P2P business and start a new business, and the expected income will come from equity and debt financing-at this time, the company has planted a signal for transformation.
This announcement of an attempt to make a big change did not save the dying Dianniu Finance.
On November 4, 2019, the Nasdaq Stock Exchange in the United States announced the suspension of Dianniu Financial stock trading. According to the notice, the stock price of Dianniu Financial has been below $1 for 30 consecutive working days and is no longer eligible for listing on Nasdaq. The rule's minimum bid requirement. When we look back at the stock price of Dianniu Financial, we can find that the price at that time has almost returned to zero.
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Source of screenshot: Yingwei Finance
The aftermath of the previous Dianniu financial thunderstorm has continued until 2020. The police report on March 24 last year showed that the public security organ had issued a red notice to the actual controller of "Dianniu Finance" through Interpol. Take criminal coercive measures in accordance with the law.
However, due to the "resurrection" operation of Dianniu Financial (later referred to as Bit Digital), after transforming its main business into a derivative business mainly engaged in blockchain and other digital assets, and changing the code and changing the company name, the business transformation has yet to be completed. It injected new impetus into the rise of the stock price, and resumed trading after the currency price met Nasdaq's requirements.
Digital currency is a new business selected by Bit Digital.
In February 2020, Yuhong, a well-known figure in the currency circle, announced to serve as Bit Digital CSO (Chief Strategy Officer) and accelerate the expansion in the field of Bitcoin mining.
Yuhong, this name is well known in the circle of old cryptocurrency players. He became famous for launching the "3 o'clock blockchain group" during the Spring Festival of 2018, and then fell from the altar because of the release of the XMX project and then broke. The plummet of the XMX project caused countless investors to lose their money, and Yuhong herself was "spit" by the entire encryption community, and thus temporarily disappeared from the community.
The acquisition of Bit Digital this time may also be another manifestation of Yuhong's "obsession".
In 2019, Yuhong took the risk of "being scolded" and became active in various communities. At that time, many people in the circle told Rhythm BlockBeats that XMX had pulled the offer, and the reason for the pull was related to the bitcoin mining project that Yuhong was working on.
Yuhong had raised funds from the circle before, and wanted to build a RMB fund of 5 billion yuan, which was mainly used to invest in Bitcoin mines. Later, there were very few applicants, and no money was raised at all. Yuhong, who could not raise funds, did not give up on the path of bitcoin mining.
In September 2020, media reported that Yuhong officially acquired Dianniu Finance and then renamed it to the current Bit Digital. And the main business happens to be Bitcoin mining.
After changing the name and completing the reorganization and adjustment, Bit Digital has become one of the hottest listed mining companies in the United States. Then, during November and December 2020, Bit Digital repeatedly raised tens of millions of dollars at prices far below the stock market price, claiming that it was used to purchase Bitcoin mining machines, "distributed in Xinjiang, Sichuan and Inner Mongolia, and is expected to be distributed in Xinjiang, Sichuan and Inner Mongolia. Fully installed by the end of December 2020."
Information shows that Bit Digital bought about 17,996 mining machines (all Antminers or Shenma mining machines). This news boosted the company's stock price to continue to soar. From the beginning of 2020 to the end of the year, BTBT's stock price rose by more than 1,800%.
Bit Digital, which has a "black history", did not rely on business transformation to successfully "wash white". The abnormal performance of entering the mining industry attracted the attention of J Capital Research, which led to the short-selling incident mentioned above, followed by Investor class action.
Even though Bit Digital is in jail, its stock price has not been hit hard. As of press time, BTBT's closing price on February 4 was $18.55, and it even rose slightly. Of course, this may be due to the current fiery cryptocurrency market, and the influence of Bitcoin is growing day by day. At this time, it coincides with the period when the epic long-short confrontation on Wall Street is still hot, and Bit Digital may be able to successfully avoid the critical attack of short-selling institutions after undergoing this series of personnel adjustments.
But Bit Digital’s problem may be more that an American company listed on Nasdaq has deployed its bitcoin mining industry in China. In fact, whether Bit Digital has purchased mining machines, and how much of the funds from the sale of stocks have been used to buy mining machines for mining business, is unknown to American stockholders on the other side of the ocean.
But from this perspective, Bit Digital has naturally become a thorn in the side of US short-selling institutions. Poor information and opacity of information have plunged enterprises into a more uncertain environment. Of course, Bit Digital is not the only listed company aiming at the three words "Bitcoin".
After listed companies enter Bitcoin mining
Stock markets around the world are rallying gratifyingly, especially companies that are dipped in bitcoin seem to have other magic powers.
From the MicroStrategy CEO's reckless holding of Bitcoin, to the announcement of "cross-border" mining by the established game company Ninetowns, and on February 3 this year, the well-known shipping company SINO announced its entry into the Bitcoin mining industry. Without exception, all three stocks have seen unprecedented gains.
