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Source: Shenlian Finance, author: Menren, reproduced with permission from Wabi.com. Operation丨Little Stone Little Mercenary Is the second season of Bitmain's "Game of Thrones" about to begin? Shortly after Dangdang.com's Li Guoqing staged the drama of seizing the company seal, the person he imitated, Bitcoin mining machine giant Wu Jihan, issued two official statements full of gunpowder in succession, directly targeting Bitmain's major shareholder Zhan Ketuan who had been kicked out previously. "We strongly condemn Zhan Ketuan's behavior of placing his personal control and vanity-centered selfish interests above the common interests of the company and all shareholders and employees." "In response to possible sabotage actions by Zhan Ketuan, the company has made full preparations and is on high alert to protect the common interests of the company and all shareholders and employees." Just one day before the statement was released, the Beijing Haidian District Justice Bureau made a reconsideration decision to revoke the previous approval of the change of registration of the legal representative of Beijing Bitmain. Will the legal representative of Bitmain be changed to Zhan Ketuan? Is the “good show” about to start again? "Bombarding Zhan Ketuan, is Wu Jihan anxious?" On April 27 and 29, the official WeChat public account of "Bitmain Technology" rarely released two "official statements" full of gunpowder on two consecutive days. The first statement is this: Zhan Ketuan ignored the common interests of the company and all its employees, and maliciously filed lawsuits during the special period of the epidemic, interfering with the normal operations of the company and undermining the country's policy of maintaining stability and growth. The company strongly condemns Zhan Ketuan's behavior of placing his selfish interests centered on personal control and vanity above the common interests of the company and all shareholders and employees, and will resolutely take legal measures to safeguard the legitimate rights and interests of the company, its shareholders and employees. The attacks on Zhan Ketuan, from the moral level to the legal level, from the corporate level to the national level, have caused many people to call it "cruel." The second statement was even more vehement, and some people even felt it was "murderous": Zhan Ketuan may take this opportunity to act recklessly and attempt to damage the common interests of the company and all shareholders and employees, including taking the following destructive actions: 1. Attacking Beijing Bit’s office and gathering to disrupt social order during the epidemic; 2. Impersonating the legal representative of Beijing Bit to sign contracts or transfer assets; 3. Impersonating the legal representative of Beijing Bit to threaten company employees; 4. Spreading false information publicly or privately among company employees to instigate division among employees; 5. Incite media hype, defame the company's current management, damage the company's image, etc. In response to the above-mentioned destructive actions that may be taken by Zhan Ketuan, and to protect the common interests of the company and all shareholders and employees, the company has made full preparations and is on high alert.
“Since he seized power, we have not seen Zhan Ketuan speak out, let alone take any radical actions. Instead, it is Wu Jihan who has been proclaiming his own justice and attacking Zhan Ketuan in the field of public opinion.” An analyst expressed his views to DeepChain. What do these two statements mean? From the outside, the poster-style statement appears to be Wu Jihan's anger, but behind it is his "failure" in court and his worry that the power he has obtained may change again. Because on February 12, 2020, Zhan Ketuan filed an administrative reconsideration with the Haidian District Justice Bureau of Beijing, requesting the revocation of the change of legal representative of Beijing Bit on January 2, 2020 and the restoration of him as the legal representative. On April 28, 2020, the Haidian District Justice Bureau of Beijing made a reconsideration decision to revoke the decision made by the Haidian District Market Supervision Bureau of Beijing on January 2, 2020 to approve the change of registration of the legal representative of Beijing Bit. That is to say, the legal representative of Bitmain may become Zhan Ketuan again. In fact, Bitmain also mentioned and acknowledged this possibility in its statement. In addition, Zhan Ketuan previously filed a pre-litigation property preservation application with the People's Court of Changle District, Fuzhou City, Fujian Province, and the court subsequently froze Bitmain's 36% equity in Fujian Zhanhua Company. Although Bitmain appealed, recent media reports said that the court had ruled that Bitmain's appeal was not valid and upheld the original judgment. The successive lawsuits and media reports have led to speculation that Zhan Ketuan is launching a fierce counterattack and that the war may reignite within the mining machine giant. 2 "Will 'Game of Thrones' continue?" Things are not as dramatic as everyone imagines. The twists and turns and resurgence of Game of Thrones are just fiction and deification in film and television dramas. DeepChain's investigation and research found that this classic case of a struggle for corporate control in business history, this feud between Wu Jihan and Zhan Ketuan, seemed to have already been decided. Back to October 28, 2019, the battle for power began. While Zhan Ketuan was attending the CPSE in Shenzhen, Wu Jihan snatched the official seal of the Hong Kong company and changed the legal representative and executive director of Bitmain to himself. He then announced to all employees of the company that Zhan Ketuan was relieved of all his duties. The top level of Bitmain is the Cayman company, which holds 100% of the shares of the Hong Kong company, and the Hong Kong company holds 100% of the shares of the Beijing company. The Beijing company is the main operating entity of Bitmain, and its only shareholder is the Hong Kong company. Therefore, as long as you get the official seal of the Hong Kong company, you can obtain "control" of the Beijing company. Immediately afterwards, on November 5, Zhan Ketuan’s position as general manager was also revoked and replaced by Wu Jihan. At this point, Wu Jihan occupied the three important positions of legal representative, executive director and general manager. It can be said that Zhan Ketuan has been completely "expelled" from the Beijing company at this time. Taking over the Beijing company is Wu Jihan’s first step. But taking over the Beijing company does not mean that the situation is under control. After all, in the top Cayman company, Zhan Ketuan is the major shareholder with nearly 60% of the voting rights. Cayman companies use AB shares. The A shares held by other shareholders only have 1x voting rights, while the B shares held by Zhan Ketuan and Wu Jihan have 10x voting rights. Therefore, Zhan Ketuan, who holds 36% of the shares, has 59.6% of the voting rights, and Wu Jihan, who holds 20.25% of the shares, has 33.5% of the voting rights. However, in November 2019, Wu Jihan organized a special shareholders' meeting and cancelled Zhan Ketuan's 10 times voting rights and changed it to one share, one vote. For Wu Jihan, the voting rights in the hands of Zhanketuan have always been a thorn in his side, because even if Wu Jihan wins the support of all small shareholders, he will only have about 40% of the voting rights, which is no match for Zhanketuan. After the shareholders' meeting canceled the 10x voting rights, Zhan Ketuan only had 36% of the voting rights. Wu Jihan and the small shareholders who supported him could gain the upper hand and turn the situation around. Depriving Zhan Ketuan of his 10 times voting rights was Wu Jihan’s second and final step, because Zhan Ketuan had already lost power. Of course, Zhan Ketuan is also aware of the seriousness of the problem. In January this year, Bloomberg disclosed that Zhan Ketuan submitted a subpoena to the Cayman Islands Court, asking the court to cancel the results of Bitmain’s shareholders’ meeting held in November, but there has been no news so far. “From last year to now, a series of actions by Zhan Ketuan have actually shown that he is already an outsider. If he could turn the tables, he would have done it long ago,” the above analyst told DeepChain. Lawyer Cui from Dacheng Law Firm also told DeepChain that the administrative reconsideration lawsuits currently being filed in China are actually not very meaningful. The key is that in Hong Kong and Cayman companies, Beijing Bitmain is only subject to the constraints of its sole shareholder, the Hong Kong company, and it depends on whether the change decisions of the Hong Kong company and the Cayman company are in compliance with the company's articles of association and whether they are valid. According to "Equity Road", if we look at the company's articles of association and related information disclosed by Bitmain when it applied for listing in Hong Kong, there is a high probability that Zhan Ketuan's defeat is irreversible. 3 "Report Card on "Defending Foreign Defence and Maintaining Domestic Security"" Since eliminating Zhan Ketuan and his forces last year, Wu Jihan has taken drastic measures to clean up the "old mountains and rivers". On December 7, 2019, Bitmain held its 2019 Customer Appreciation Meeting in Chengdu. It was the first time that Wu Jihan made a public appearance after his return from power, and the slogan of the event was also meaningful - the Bitmain you are familiar with is back. Installment payment, joint mining, and option hedging, Wu Jihan launched the "three-pronged approach" of products and services, which excited the miners present. On January 30, 2020, The Block reported that Matrix, a new company founded by Bitmain, had accumulated more than $500 million in digital asset custody, generated $500 million in spot trading volume, and created a $100 million loan balance in less than a year. This company, which was once seen as a company founded by Wu Jihan at the cost of hardship, has achieved quite good results under Wu Jihan's leadership, which are considered quite good by the outside world. In February 2020, Bitmain launched new mining machines S19Pro and S19, with a performance of 29.5J/TH. As the world's first machine with an energy consumption ratio of less than 30, the S19 series was quickly sold out after being released on the official website. In early April, Bitmain established the Supercomputing Center Research Institute (BSCI) to provide one-stop solutions for supercomputing centers. Recently, more good news was revealed. Wu Blockchain revealed that Bitmain recently announced internally that the company's revenue in the first four months of 2020 exceeded 300 million US dollars, and it regained market share. In addition, Bitmain's four mining farms around the world are under construction and renovation, the absolute computing power of the two mining pools has also been improved, and even the AI business is growing rapidly. Bitmain said that its AI business began to develop rapidly after adjusting its structure, creating economic and social value in the fields of smart communities, safe cities, new retail, and animal protection. The third-generation cloud AI chip BM1684 has been mass-produced and shipped, achieving breakthroughs for multiple major customers and receiving the final payment for orders worth tens of millions of yuan. The fourth-generation cloud AI chip BM1686 is also being upgraded and planned, and its competitiveness will be greatly improved. "It has been more than half a year since Mr. Han returned. The company's operations have continued to improve and customer relations have been greatly improved. Mr. Han is the soul of the mainland." "Who can make the company stronger and bigger? It's obviously Boss Wu." Whether from the results or from public opinion, everything seems to prove the fact that Wu Jihan is the owner of Bitmain, and only Wu Jihan can lead Bitmain to success. Although Wu Jihan and Zhan Ketuan are still competing for companies such as Fujian Zhanhua, analysts believe that all of these companies are 100% controlled by Beijing Bitmain, and the control of Beijing Bitmain and Hong Kong Bitmain is in the hands of Wu Jihan. Therefore, Zhan Ketuan cannot stir up any trouble and will not harm the overall situation. To some extent, it can be said that Wu Jihan defeated Zhan Ketuan and handed in a good report card. 4 "The hidden worries behind the power struggle" For Wu Jihan, although he has achieved a phased victory, he is still facing internal and external troubles and is under tremendous pressure. Internally, although there is almost no possibility for Zhan Ketuan to make a comeback, he is still a hidden danger to the normal operation and development of the company. Take the lawsuit involving Fujian Zhanhua for example. Although Bitmain’s statement intentionally downplayed it, according to CoinNews, Fujian Zhanhua is an important piece of the puzzle for Bitmain. In the 2018 prospectus, Fujian Zhanhua was defined as Bitmain’s “mining hardware sales center” in China. Bitmain’s two major sales channels, the pre-sales and after-sales WeChat accounts of Antminers, were previously owned and operated by Fujian Zhanhua. In addition, although the "possible sabotage activities" of Zhan Ketuan listed in Bitmain's statement sound ridiculous, they are not impossible. After all, Li Guoqing, the founder of Dangdang.com who was kicked out, has provided a precedent. If Zhan Ketuan succeeds in becoming the legal representative of Bitmain, it will inevitably interfere with the company's morale and business activities, which is naturally a big hidden danger for Bitmain, which is still recovering. To the outside world, although Bitmain achieved $300 million in revenue in the first quarter, Wu Jihan still faces many challenges. Canaan Creative, which has already gone public, Ebang International, which is seeking a listing, and MicroBT, which is gaining momentum, are all challengers to Bitmain. Especially MicroBT, a company founded by former employees of Bitmain, has seen rapid upgrading and expansion in both technology and market in the past two years. Zhang Wencheng, head of sales of WhatsMiner, once revealed that in 2019, MicroBT sold 600,000 WhatsMiner M20 series mining machines. The computing power of these mining machines accounts for 30% of the global Bitcoin mining computing power, and MicroBT's US dollar revenue in 2019 is also estimated to reach nine figures. In the relatively small market of Bitcoin mining machines, there is a big question mark over how long Bitmain can maintain its former leading position and whether it can maintain it. In addition, although Wu Jihan defeated Zhan Ketuan, returned to his original intention, and focused on the main business, he still could not solve one problem, that is, how to seek sustained and stable growth in the still very small and volatile cryptocurrency market. AI, which Zhan Ketuan cares about and which Wu Jihan has not given up on, may be a new way out, but it is also the most difficult one. Where will the de-"Jimmy-ized" Bitmain go next? Equity Road, "The important turning point in the dispute over Bitmain's shareholders, 3 strategies for the founder to gain control of the company" Bixin Block, "Bitmain: Zhan Ketuan maliciously sued and undermined national policies" Wu talks about blockchain, "Bitmain's revenue in the first four months exceeded 300 million US dollars, AI business grew rapidly, and employees were given tens of millions of bonuses" This article is original by DeepChain (ID: deepchain-eva). Unauthorized reproduction is prohibited. 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