Tuesday, April 06, 2021
“Opaque Businesses”
Shortseller targets Chinese crypto firm
For the crypto company Ebang, things are going steeply downhill. The shares of the Chinese blockchain company listed on the Nasdaq collapse by up to 22 percent. Responsible for this are the allegations of the short seller Hindenburg, who speaks of “a series of opaque deals”.
Allegations by the short seller Hindenburg send the shares of the Chinese blockchain company Ebang listed on the US technology exchange Nasdaq on a downward slide. The shares collapse by up to 22 percent. Hindenburg accuses Ebang of having withdrawn a large part of the generated capital proceeds from the company through “a series of opaque deals with insiders and dubious counterparties”. In addition, the statement to be a leading Bitcoin mining machine manufacturer is not supported by evidence.
Ebang initially did not comment on the allegations. Hindenburg had recently also bet on falling prices at the Chinese blockchain company Sos. The soaring of cryptocurrencies has recently pushed Chinese companies to raise capital in the industry.
The second most important cyber currency after Bitcoin, Ethereum, is currently back on the hunt for records. With an increase of up to 2.8 percent and a value of $ 2,162.40, it is more expensive than ever. Meanwhile, Bitcoin tried in vain to recapture the 60,000 mark. The oldest cyber currency is currently stagnating at $ 58,695.
Short sellers like Hindenburg borrow stocks to sell them right away. They are betting that they will be able to stock up on the papers for less by the return date. They reap the difference as a profit. This practice is called “short selling” in stock market jargon.
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