Chinese Penny Stock Coolpad Invests $53M in BTC and Bitcoin Miners

  • Sergey Maga
  • 18 June, 2024 02:18
Chinese Penny Stock Coolpad Invests $53M in BTC and Bitcoin Miners

Coolpad Group, a Chinese phone maker listed in Hong Kong with a market cap of $125 million, is expanding its investment in Bitcoin mining despite a stock suspension. The company announced an equipment procurement contract worth $13.6 million to increase its bitcoin mining hashrate from 873 PH/s to 1.5 EH/s. This implies a cost of about $21/TH/s, suggesting the purchase of the latest generation of miners from Bitmain or MicroBT, according to TheMinerMag.

Founded in the 1990s, Coolpad initially made pagers and later pivoted to mobile phones, targeting the elderly market in China. Its subsidiary, Coolbit Technologies, began bitcoin mining last year. As of October 2023, Coolpad had an effective hashrate of 110 PH/s in North America, accumulating around 11 BTC. In November, the company acquired an additional 600 PH/s for about $20/TH/s.

In addition to mining equipment, Coolpad has invested in Bitcoin spot ETFs and CleanSpark stock. Between April and May, Coolpad acquired 1.5 million CLSK shares at $15.89 per share, totaling $23.84 million. The company also purchased BlackRock’s IBIT shares for $4.03 million at $35.64 per share. Coolpad’s investment in CLSK is currently up 11%.

However, trading of Coolpad’s stock has been suspended since March 28, following the resignation of its auditor Ernst & Young (EY) and a delay in its 2023 annual report. EY received anonymous allegations in January 2024 regarding the company’s “misappropriate use of funds in transactions with parties that are suspected to be connected persons of one of the directors.” EY indicated it had not completed its planned procedures over Coolpad’s new bitcoin mining business, including the capital expenditures.

Before the suspension, Coolpad’s stock was trading at HK$0.06 per share, worth less than 1 cent in USD. Despite these challenges, Coolpad plans to spin off Coolbit Technologies to be listed on Nasdaq, given that most of its miners are hosted in North America.

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