Further to LeapRate’s earlier report about Bitcoin Group encountering hurdles regarding its plans to float on ASX, the company announced today that it is withdrawing from its IPO and ASX listing application.
Bitcoin Group will continue with its bitcoin mining activities and is considering renewing its IPO and ASX listing attempts in the future.The company says it is likely to proceed with a new offer after Blockchain halving has occurred and the price of bitcoin responds to the halving, which Bitcoin Group expects to occur by September 2016.
Meanwhile, investors are instructed to contact the company regarding IPO refunds.
The announcement from the company can be viewed below.
Dear Investor
The Directors of Bitcoin Group Ltd would firstly like to thank all our IPO investors for their support in our attempt to become the world’s first bitcoin IPO.
Bitcoin Group is an audited public company with a track record of profitably, having mined over $8 million dollars worth of bitcoins (14,000 bitcoins) since 2014.
Considering the long and eventful journey the IPO has taken, we would like to offer our investors a summary of the past 6 months, that led to the disappointing outcome of announcing today, that Bitcoin Group is withdrawing the Second Replacement Prospectus dated 24 December 2015, to list on the Australian Stock Exchange (ASX) and return IPO subscription application monies to investors.
We will be continuing our bitcoin mining activities.
The key reason for the withdrawal of the offer is due to the requirement of the ASX, that Bitcoin Group procure a working capital report from an independent accounting firm, a report not specifically required for a listing on the ASX. In preparing the working capital report, Grant Thornton, the independent accountant was required to factor in the reduction of newly minted bitcoins released on the occurrence of block halving in July 2016, without regard to the expected increase in bitcoin price.
The last time block halving occurred (28 November 2012), the bitcoin price increased in value by 1032% in the proceeding 6 months (from US$12.16 to US$125.58). Unfortunately, ASIC prohibited any forecasting on the bitcoin price which resulted in a report which did not allow for any increase in bitcoin price upon the number of bitcoins available to be mined halving in July 2016.
Importantly, the Directors want investors to note that:
The working capital report did show that without any increase in the bitcoin price being tailored in, Bitcoin Group has sufficient working capital to meet its objectives over the forward 12 month period; and
The working capital report identified that the preparation of the report did not have regard to the key upside of block halving, being any expected:
- increase in the bitcoin price.
- decrease in difficulty.
- increase in mining equipment efficiency.
The Directors consider that it is appropriate to now withdraw from the IPO process and consider proceeding with a new offer after Blockchain halving has occurred and the price of bitcoin responds to the halving, which we expect to occur by September 2016.
The Directors had hoped to share our company’s opportunity of future success in the rapidly growing bitcoin ecosystem with the Australian investment community.
The Directors intend to proceed with a new offer after block halving to allow time for the bitcoin price to reflect the reduced number of bitcoins being released.
Application withdrawals and refund process:
We’ll be working closely with Computershare to ensure all IPO investor application subscription monies are refunded in an efficient and timely manner.
Please email us at [email protected] including your full name, address, bank details and amount applied for, allowing us to instruct Computershare to process the refund via EFT.
If EFT direct credit is not available to you, a cheque will be forwarded to your registered address on your IPO application form.
We would appreciate our investors understanding while we work through the refund process.
If you have any questions about Bitcoin Group or the IPO, feel free to call our office on 1300 88 38 48 or email [email protected]
Best regards,
Sam Lee (Chief Executive Officer)
Allan Guo (Chief Financial Officer)
Ryan Xu (Chief Strategy Officer)
Martin Davidson (Business Development Manager)
Jacob Cheng (Operations Manager)
Jin Chen (Technical Manager)”
For the full announcement from Bitcoin Group, click here.