500.com, a Chinese lottery service provider, is set to acquire $14.4 million worth of Bitcoin mining machines as it steps up its efforts of pursuing new opportunities in the cryptocurrency market.
This deal has been signed with unnamed non-US sellers and will have the supplier use its Class A ordinary shares to finance the purchases.
500.com expects to distribute 11,882,860 newly-issued Class A shares with a value of $1.21 per share, corresponding to $12.10 per American Depositary Shares (ADS), which is equivalent to 10 ordinary shares.
The closing trading price for 500.com’s ADS on January 8, the last trading day before the agreement, adds up to a total consideration of about $14.4 million.
The Bitcoin machines that 500.com will acquire include models such as the T17, S17, S9, and M20s. The closing transaction is still awaiting certain conditions, including the satisfactory completion of required closing conditions of the sellers.
Suppose there is no delay in the schedule, the acquisition is expected to close in the first quarter of this year. Once completed, 500.com plans to install all Bitcoin mining machines in four weeks.
The company hopes to start generating revenue from Bitcoin mining in the first half of 2021.