Chinese Lotto Company 500.com Overtakes Btc.com in an Acquisition
A Chinese company, namely 500.com, involved in the business of sports lottery and who is also registered publicly within the US is trying to enter the crypto arena. Announced that it has acquired a widely recognized bitcoin mining company called Btc.com in an acquisition. Went in losses during 2020 however, the year 2021 started on a high note.
It has been confirmed through 500.com’s announcement that it has bought Btc.com through a company called Blockchain Alliance. The transaction of acquisition was executed through the issuance of shares, particularly A class. The issued shares represented at least 10% of the total shareholding within the Chinese company, which is public registered within the US.
It was reported that 500.com entered into a share purchase agreement with a Cayman Island registered blockchain company called Blockchain Alliance Technologies.
On the other hand, 500.com is one of the biggest business houses of China involved in providing gambling space online. Furthermore, the company has been selling online based lotto tickets and offers multiple services to clients locally and globally, including in the US. As of today, the market capitalization of 500.com is over and above US$ 860 Million.
The agreement suggests that whatever profits Btc.com will earn, Btc.com’s existing shareholders shall get a 5% stake in the Chinese company. However, the stake will be transferred only and if the profit is over and above US$ 20 Million and earned before the end of this year. This would simply mean that a total of 22,176,718 ordinary shares shall be issued in due course under the Class A category.
As per the agreement, the first transaction of shares transfer would be taking place on or prior to 15th April, 2021.
It was further informed that the operator of the proposed pool shall be Bitdeer Technologies Holding. The ultimate owner would be Jihan Wu, who is globally recognized as the co-founder of an acclaimed Bitcoin mining company, Bitmain. It has been stated by Btc.com that its current Bitcoinhashrate has exceeded 10%. Resultantly, the pool is now considered one of the biggest mining pools amongst the top 5 mining pools of the world.
However, the pandemic brought a miserable year for the lotto company which succumbed to huge losses. As per its annual report, 500.com was forced to bear losses to the tune of US$ 30 Million in 2020 alone.
But the Bitcoin bull-run since October 2020 till to date brought significant profits to the Bitcoin mining company. The company also executed an agreement with blockchain companies for obtaining a Bitcoin mining machine. As per the agreement, 500.com paid at least US$ 14.4 Million for obtaining advanced mining machines.
In pursuance of the purchase deal, the company has acquired modern machines such as m20, S9, T & S 17 through Bitmain.
