What happened to Bitmain yesterday, Part 8 (The acquisition with a valuation of 4 billion yuan was officially announced)

King James, who claimed that he would "lay down his butcher knife" and would not let anyone make a fool of themselves, was angry.

On the evening of the 21st, Wu Jihan convened a general meeting and invited lawyers to provide legal professional explanations. Zhan called on employees not to participate in the meeting and issued an emotional manifesto in response to Wu Jihan’s previous statement (see “What Happened to Bitmain Yesterday Series 7 (Cut Off Chip Supply)”). Excluding the accusations and the part where each party spoke out, the following key information was revealed:

First: Both parties are deadlocked, and the focus is still on the struggle for the ownership of employees. Here, Zhan is on the offensive, so his attitude is more radical, mainly threatening, declaring that he will pursue legal responsibility, and frequently sending letters to employees through lawyers. Zhan's temporary control of Beijing Bitmain is an advantage, but due to the HR's arbitrary exposure of employee privacy threats and the recall of a large number of Huawei executives, neutral employees have become hesitant. "A letter from a Bitmain R&D employee (recommended by Wu Shuo)"

Second: Zhan said that if necessary, he would purchase chips directly from Beijing Bitmain (TSMC). From another perspective, could Wu Jihan also purchase chips from Hong Kong Bitmain and ask companies such as Xindong and Yibit to do the foundry (pure speculation). In this way, the emergence of two "Bitmains" seems to allow for fair competition, but the premise is that both parties still have to negotiate and settle the shared patents.

Third: In the last paragraph, Zhan made it clear that he offered Wu Jihan an olive branch to acquire shares at a valuation of 4 billion US dollars. According to the Hurun ranking, Bitmain's current valuation is indeed between 4 billion and 5 billion US dollars. According to the figure below, if an acquisition is needed, Zhan needs to prepare more than 1 billion US dollars. There were also rumors that he was trying to acquire it for 1 billion US dollars. Wu said blockchain learned that in mid-May, Zhan said that he would entrust UBS to handle employee equity matters.

There are three problems here:

First, does Wu Jihan think that the valuation of 4 billion US dollars is too low? 4 billion is the lowest valuation now, and it is rare to hear of acquisitions at the lowest valuation, which usually has some premium. If things go smoothly, it should be easy for Bitmain to reach a valuation of 10 billion US dollars when it goes public. James himself said that he wants to achieve a valuation of 50 billion US dollars within 3-5 years.

Second, whether Zhan can fully acquire or partially acquire, for example, only acquire more than 50% of personal shares, or is it just a rhetoric. After all, only local governments or top overseas funds can come up with $1 billion. However, due to the sensitivity of local governments to the mining industry, it is unlikely that they will come up with it. UBS mentioned above plays more of an underwriter role and is unlikely to directly invest hundreds of millions of dollars.

Third, even if there is a $1 billion investment, it must be accompanied by extremely strict gambling clauses. Will James be able to accept it? When Bitmain was raising funds in pre-IPO, it signed a gambling clause that it would be listed within 5 years. If it fails to go public, it will have to repay the financing of $340 million + interest. Therefore, whoever takes back the control will face urgent pressure to go public.

Fortunately, with the successful listing of Ebang, there should be no problem with Bitmain's listing path itself, it is just a matter of timing. For most employees, ending the chaos as soon as possible and making profits from the company's successful listing should be their greatest desire.

Wu Jihan’s statement:

Zhan's statement:

(Finally, Zhan's post accused the use of a cyber army. I really want to know who hired the cyber army to vote on my site and illegally paid to delete posts a few days ago. I suggest that everyone should not use cyber army. If the cyber army affects me, no matter who did it, Wu Shuo will do whatever it takes to fight to the end. Although Wu Shuo happens to be one of the 30 million people with the surname Wu in China, he will not take sides and insists on objectively selecting valid information for you. If there is any deviation, any party is welcome to correct and modify it.)