Publicly traded Chinese gaming company The9 (NCTY) said Friday it agreed to buy 2,000 units of AvalonMiners bitcoin mining machines for about $6.72 million in stock.
In an announcement, The9 said it signed a memorandum of understanding to buy the machines with a total hashrate of about 100PH/S. To pay for the machines, The9 said it will issue 8.12 million ordinary shares, equivalent to 270,913 American depositary shares (ADS). Based on the company’s share price of $24.81 prior to signing the MOU, the deal is valued at $6.72 million.
The9 also said it completed the signing of definitive agreements for 12,246 units of bitcoin mining machines with a total hashrate of 288PH/S. Under the terms of these deals, The9 will issue 9,387,840 Class A ordinary shares (equivalent to 312,928 ADS) to the sellers, with a lockup period of six months. If the same ADS price as the earlier agreements were used, these pacts would be valued in total at about $7.76 million.
As reported by CoinDesk, bitcoin’s hashrate, which is a way to measure the total power consumption and mining output of the network, has topped a new all-time high as mining firms like The9 continue to add more hash power.
The9’s ADS were down a little more than 4% in recent trading to $27.21.
The leader in news and information on cryptocurrency, digital assets and the future of money, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups. As part of their compensation, certain CoinDesk employees, including editorial employees, may receive exposure to DCG equity in the form of stock appreciation rights, which vest over a multi-year period. CoinDesk journalists are not allowed to purchase stock outright in DCG.