A listed Chinese sports lottery company in the US is reaching out into the crypto industry by announcing another similar maneuver. 500.com Ltd announced that it has acquired Btc.com, the well-known Bitcoin mining pool.
Jihan Wu is the “largest beneficial owner” of the mining pool
According to the announcement, the online lottery service provider has bought the company from the Blockchain Alliance. 500.com completed the transaction by issuing new Class A shares, representing a nearly 10% stake in the publicly traded Chinese company.
According to the filing, 500.com Ltd has entered into the exchange agreement with Blockchain Alliance Technologies Holding Company, a Cayman Islands-based company. Currently, the Chinese lottery giant has a market capitalization of $ 860 million, and the deal sets some terms.
One of them includes the profits made by Btc.com. If those net numbers are no less than $ 20 million by the end of 2021, current shareholders will receive up to a 5% stake in 500.com Ltd.
This means that a maximum of 22,176,718 additional “Class A Common Shares” may be issued, the announcement states. The first transaction under the agreement is expected to take place on or before April 15, 2021.
Bitdeer Technologies Holding Company is the operator of the pool. In addition, the “largest beneficial owner” is currently Bitmain co-founder Jihan Wu.
Btc.com claims to have over 10% of the Bitcoin (BTC) hash rate, making it one of the five largest mining pools in the world.
Not 500.com’s first crypto-related business maneuver
But 2020 was not a good year for the Chinese lottery service provider. The company reported losses of around $ 29.9 million in 2020, according to the company’s annual figures.
However, 500.com got off to a positive start to the year due to a significant acquisition related to bitcoin mining. As news.Bitcoin.com reported in early January, the company has reached an initial agreement to acquire BTC mining equipment from an undisclosed US seller.
With the full $ 14.4 million transaction amount, the company can acquire the machines, including the M20 models from Microbt S17, T17 and S9 from Bitmain.
What do you think of 500.com’s latest crypto acquisition? Let us know in the comments below.
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