The9 Ltd. (Nasdaq: NCTY) announced it has landed a deal with a number of investors in the cryptocurrencies mining industry to refocus its business on blockchain and digital currency technologies.
The investors include Jianping Kong and Qifeng Sun, two former directors of bitcoin mining equipment company Canaan (Nasdaq: CAN), as well as Li Zhang and Enguang Li, according to RTT News.
Under the agreement, The9, a Chinese mobile game developer, will establish a subsidiary NBTC Ltd. The company expects to build and operate a digital currency mining business with the highest digital currency computing share in the world, it said.
The9 has been ridden with troubles over the past few quarters and the net profit has been negative since 2009. It positions itself as an internet company, but it primarily operates self-developed and licensed mobile games, including its proprietary CrossFire New Mobile Game and Audition. The new business line, if successful, may help The9 turn its troubles around.
“Our goal is to build up cryptocurrencies mining machines for The9 that will contribute 8% to 10% of the global hash rate of Bitcoin, 10% of the global hash rate of Ethereum and 10% of the global hash rate of Grin and become one of the world's largest cryptocurrencies mining companies in terms of hash rate. This will also speed up our other cryptocurrency-related businesses,” said Jun Zhu, the chairman and chief executive officer of The9.
Shares of The9 were trading up 23% intraday Thursday, at $18.38 apiece on the news.