A U.S.-listed Chinese sports lottery company, 500.com Ltd, announced it has entered into a preliminary agreement to acquire Bitcoin mining machines by issuing $14.4 million worth of Class A ordinary shares. This move signals a growing trend of traditional enterprises entering the cryptocurrency mining space.
Deal Details and Machine Models
According to the official announcement, 500.com will issue 11,882,860 Class A shares at a price of $1.21 per share to cover the purchase. The miners to be acquired include Bitmain's Antminer models S17, T17, S9, as well as Microbt's M20s units. The company estimates that the total hash rate capacity after installation will reach 918.5 PH/s.
The transaction is still subject to conditions to be satisfied by the sellers. 500.com expects the deal to be fully completed before the end of Q1 2021, with all machines installed within four weeks of receipt. The company forecasts that mining revenue generation will begin in the first half of 2021.
Stock Surges on News
Following the announcement, 500.com's shares jumped over 11%, reaching a new yearly high of $13.94. The market reacted positively to the company's pivot into Bitcoin mining, which is seen as a potential new revenue stream beyond its core lottery business.
The move mirrors a broader trend seen in late 2020. For example, U.S. miner Riot Blockchain saw its market capitalization hit $1 billion. Cleanspark, a microgrid software company, announced on December 22, 2020, that it would purchase 1,000 Antminer S19 units, boosting its mining capacity to 300 PH/s. Cleanspark's stock price climbed 100% between December 11 and the end of 2020.
The entry of a lottery firm into Bitcoin mining further illustrates the growing institutional interest in cryptocurrency mining assets. As traditional capital continues to flow into the sector, the mining industry is becoming more institutionalized and scalable.