500.com, a tech-innovation company, has reached a deal with undisclosed non-US sellers to acquire bitcoin mining machines. The purchase will be funded through the issuance of 11,882,860 newly-issued Class A shares valued at $1.21 per share. The total consideration for the transaction is approximately $14.4m based on the closing trading price of the company’s ADS on January 8.
The acquired mining machines include popular models such as the S17, T17, M20s, and S9. The completion of the acquisition is subject to certain conditions, including satisfying the sellers’ closing requirements. Assuming no delays, the transaction is anticipated to close in the first quarter of 2021. Within four weeks of completion, 500.com plans to install all acquired Bitcoin mining machines and expects to start generating revenue from Bitcoin mining in the first half of this year.
The machines’ total hash power capacity is estimated to be around 918.5 petahashes per second, indicating their substantial operational capability in cryptocurrency code processing.
Adding to its tech-innovation strategy, 500.com recently appointed Xianfeng Yang as its new chief executive. Yang’s expertise in blockchain and cryptocurrency industries will help drive the company’s exploration of new business opportunities.
In November, 500.com reported a 37.1% year-on-year decline in revenue for the third quarter of 2020. However, the company’s Swedish operating license renewal, which allowed it to resume activity in the market in September, contributed positively. The Swedish-facing online lottery betting and casino operations, under its subsidiary The Multi Group, generated RMB3.3m of the total revenue of RMB6.1m during the period ending September 30.
