Zhan Ketuan, the former Bitmain co-founder previously kicked out of his position, returned to power earlier this month, is proposing a solution to end the company's internal war.
Zhan's downward offering
In a letter on Sunday, Zhan, who as the largest shareholder of Bitmain owns 36% of the shares, offered to buy the shares owned by his rival co-founder Wu Jihan, by several founding members and some Bitmain employees, with a company valuation of $ 4 billion.
Wu alone controls approximately 20% of Bitmain and three other founding members own approximately 15% in total. The stock option pool of Bitmain employees has another 19% and the remaining 10% belongs to external investors.
But quotation Zhan's $ 4 billion company is significantly lower than the market peak in summer 2018. Bitmain had been valued at around $ 1 billion in September 2017 during its Serie A round.
In August 2018, $ 12 billion was valued for fundraising and $ 14,5 billion in a pre-IPO round. Zhan's offer is designed to attempt to start a negotiation that could end the divisions that have fragmented the company after the latest events.
The blackmail of the chips
In addition to causing division among employees, the struggle for power is now endangering the company's production. Zhan's letter was written in response to a statement on the official Beijing Bitmain website, controlled by Wu, stating that the Hong Kong parent subsidiary had stopped supplying chips to its Shenzhen office.
"Bitmain Hong Kong has temporarily suspended the supply of chips to Century Cloud Core, which is now controlled by Zhan's followers, until it is ensured, through negotiation, that all Zhan's followers are committed to protecting the interest of customers of Bitmain and the company as a whole, "reads the statement.
Bitmain Technologies Limited in Hong Kong is Bitmain's offshore sales and procurement center for crypto mining hardware. After returning to the company, Zhan had taken control of the Century Cloud Core and Bitmain warehouse in Shenzhen and suspended shipments to customers.
In his letter, Zhan also accused Wu, among other things, of forcing decisions made during a "shareholder meeting" last November at the holding company of the Cayman Islands of Bitmain.
In fact, the meeting was never held because "several other shareholders including Zhan Ketuan have never received a notice of that meeting," said Zhan. The two sides now have legal proceedings pending in the Cayman Islands regarding Zhan's 60% voting power disputes in Bitmain.
