Ebang Stocks Collapse With ‘open Short’ Recommendations

The shares of the mining company Ebang by the end of trading on April 6-7 lost in price by 14.8%. This is how the market reacted to the publication of a report by Hindenburg Research analysts with a recommendation to “open short” on securities.

NEW FROM US– Ebang: Yet Another Crypto “China Hustle” Absconding With U.S. Investor Cash

(1/x)https://t.co/mxSmlvKii3 $EBON

— Hindenburg Research (@HindenburgRes) April 6, 2021

Experts warned that the China-based firm misled investors over the allocation of investments.

The report claims that of the $ 374 million raised in four rounds after the IPO, Ebang sent $ 103 million to purchase shares of the underwriter AMTD Group with a dubious reputation. $ 21 million of these funds went to pay off loans raised by a relative of the founder of the company, Dong Hu.

The authors of the report indicated that the manufacturer’s sales fell to a minimum, and the lineup is outdated. In the first half of 2020, Ebang delivered 6,000 mining devices.

Hindenburg Research also pointed to the recently launched Ebonex platform. According to analysts, she appeared to “divert the eyes”.

Analysts called Ebang a good reminder to follow the “quality at buyer’s risk” rule [caveat emptor]… It obliges you to conduct proper analysis before buying stocks.

The company called Hindenburg Research’s findings unfounded.

“The report contains many errors, unconfirmed speculations and inaccurate interpretations of events. The company will take all necessary and appropriate measures to protect the interests of shareholders, ”the press release says.

At the end of June 2020, Ebang revealed plans to expand the business by creating an exchange following an IPO on the Nasdaq.

In February 2021, Ebang stock did not break records, unlike its competitors. Poor financial results for the first half of the year were mentioned among the reasons.