In November, Sam Lee and his Bitcoin Group in Australia made news for positioning themselves for a major Initial Public Offering on the Australian Stock Exchange. Upon final assessment by the Australian financial authorities, the Bitcoin Group will not be able to “go public” until 2016, at the earliest, reports the Sydney Morning Herald.
Read the full story below.
The problem for Bitcoin Group, an Australian Bitcoin mining company, is reported to be due to an error in following the regulation listing rules. These rules state that the listing date must commence within ninety days of the time the Australian Securities and Investments Commission receives the prospectus, which in this case was a replacement. The ASIC received it on September 4th, and the listing date was presented as January 6th, a clear violation. They will have to enter a third supplementary prospectus in mid-January, 2016, at the earliest.
This delay in the IPO is not the first for the company in their journey for investment nirvana. This will be the fifth time that they have had to delay or resubmit a prospectus. Bitcoin Group is looking to become the second-ever Bitcoin IPO after digitalBTC, also in Australia, who created a reverse listing for $9.1 million back in 2014. digitalBTC, also a Bitcoin mining organization at the time, has since restructured to focus on U.S. to Latin America remittances using bitcoin’s blockchain. The Bitcoin Group is looking to raise $20 million at $0.20 USD per share.
ASIC has stopped Bitcoin Group's IPO progress specifically twice before. The first was within a fortnight of receiving the original prospectus, which put the listing date September 2. The second issue was found after the group was discovered to be promoting the fundraising round on a Chinese social media platform, known as WeChat, before the prospectus was approved and lodged.
Last month, I spoke to Sam Lee, CEO of Bitcoin Group, on an AMA discussing the IPO and how a company in the Bitcoin space should reach this point. This is what he shared with me on this topic:
“Become a subject matter expert (e.g., Bitcoin), a pre-requisite to sound convincing. Sound convincing, and convince people smarter than me who can cover off my weaknesses to sign-up as co-founders, for bonus points, make sure they are "all in" with their own reputation and capital. With nothing but an idea, investors can only look at the team since the team looks good and are committed by their "all in" attitude, they invest. Bring on reliable experts to prove the business model (that Bitcoin Mining is profitable.) Deliver on your promises to these investors and re-raise from the public, in our case we've done it through an IPO on the ASX.”
Obviously, they have not completed this final, and very important, piece of the puzzle and some fundamental protocols have not been observed in its preparation. Maybe, in a year or two, they will all look back and laugh on such miscues, but the negative publicity on how this has been mishandled can do them no good when it comes to soliciting investment capital from the public.