The9 Falls 23% on $125 Million Offering

Maxim Group has agreed to purchase 3.77 million American depositary shares of The9.
Benjamin WangMar 31,2021,18:50

The9 Limited (Nasdaq: NCTY) announced Wednesday that it has entered into an underwriting agreement with Maxim Group LLC to purchase 3.77 million American depositary shares and warrants to purchase 2.82 million ADSs, at a price of $33.20 per ADS.

The high-tech Internet company said the gross proceeds from the offering are expected to be approximately $125 million. In addition, the company has granted the underwriters a 45-day option to purchase up to an additional 564,765 ADSs and a warrant to purchase up to an additional 423,574 ADS.

Formerly a troubled mobile game developer in China trading below the $1 minimum bid per share, The9 recently delved into cryptocurrency mining and turned its luck around. In January, the company it signed five legally binding Memorandum of Understanding with five Bitcoin mining machine owners to purchase Bitcoin mining machines. The stock has gone wild since the beginning of 2021, rising to a little over $82 per share at its height in February on the bitcoin boom. While the stock now trades at $31.80 per share as of midday Wednesday (down 23% on the day) the stock price is still nearly 8 times higher than it was at the start of 2021.

Recently, the company reported it signed a definitive cooperation and investment agreement with Jianping Kong, the former director and co-chairman of Canaan Inc. (Nasdaq: CAN) and the other partners. These investors will provide help on the development of The9’s cryptocurrency mining business.

In February, the company said it is buying an additional $10 million worth of Filecoin (FIL) mining machines. Currently, The9 owns an independent node on Filecoin blockchain and 8 Pebibyte of effective storage mining power in the Filecoin network.

Topics:The9; China; U.S.