Cisco sinks on report Amazon wading into networking equipment

(Reuters) - Shares of Cisco Systems Inc and other network equipment makers fell on Friday after a report that Amazon.com Inc’s cloud services business was considering selling its own network switches to business customers at much lower prices.

FILE PHOTO: Amazon boxes are seen stacked for delivery in the Manhattan borough of New York City, January 29, 2016. REUTERS/Mike Segar/File Photo

Cisco’s shares were down 5 percent, wiping off nearly $ 11 billion from its market capitalization. Shares of Juniper Networks Inc and Arista Networks Inc fell 4 percent as investors feared that Amazon’s scale and pricing power could disrupt the sector.

The report comes days after Amazon sent shockwaves across the drug retailing sector with its move to buy small online pharmacy PillPack.

The networking devices will consist of open-source software and unbranded hardware known as “white-box” switches and come with built-in connections to AWS cloud services, such as servers and storage, the Information said.

Amazon Web Services could price its white-box switches 70-80 percent less than comparable switches from networking giant Cisco, the report said, citing one of the people with direct knowledge of the unit’s plan.

“If true, we think this would be a notable negative for the networking equipment space going forward,” RBC Capital Markets analyst Mitch Steves wrote in a note.

AWS expects to launch the switches for sale within the next 18 months, according to the report.

Amazon and Juniper did not immediately respond to a request for comment. Cisco and Arista declined to comment.

Reporting by Arjun Panchadar in Bengaluru; Editing by Arun Koyyur and Saumyadeb Chakrabarty

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Two Chinese bitcoin mining equipment makers plan $1 billion Hong Kong listings: IFR

HONG KONG (Reuters) - Two Chinese bitcoin mining equipment makers plan to raise up to $ 1 billion each from Hong Kong listings this year, riding on strong global interest in cryptocurrencies, IFR reported on Tuesday, citing people familiar with the plans.

FILE PHOTO: A token of the virtual currency Bitcoin is seen placed on a monitor that displays binary digits in this illustration picture, December 8, 2017. REUTERS/Dado Ruvic//File Photo

Canaan Creative filed a listing application to the Stock Exchange of Hong Kong on Monday, IFR, a Thomson Reuters publication, reported.

Zhejiang Ebang Communication has also started working with advisers on a proposed Hong Kong float of up to $ 1 billon, reported IFR.

Ebang listed on China’s National Equities Exchange and Quotations, also known as the New Third Board, in 2015 and was

delisted from the over-the-counter market in March after announcing in January that it would seek a Hong Kong listing.

Chinese bitcoin mining equipment makers are hungry for capital to fund their growth as the heightened interest in cryptocurrencies has led to a surge in demand for their machines.

Canaan, which sells “Avalon” mining machines with customised super-fast ASIC chips, made revenue of more than 1 billion yuan in 2017. Although cryptocurrencies can be mined using regular computer equipment, specialised processing devices dedicated to mining are more effective and can generate more income.

The company’s co-chairman Jianping Kong told Reuters in April that he expected China’s push to promote the domestic chip industry to help drive growth for the company.

Credit Suisse, CMB International, Deutsche Bank and Morgan Stanley are joint sponsors for Canaan’s float, according to IFR.

Canaan Creative declined to comment. Ebang could not be immediately reached for comment. All the banks didn’t immediately respond to a request for comment.

Canaan’s IPO valuation has yet to be set as there is no listed comparable and the prices of cryptocurrencies have

fluctuated a lot, reported IFR. It was valued at $ 500 million in mid-2017, IFR said, attributing it to one of the people.

Reporting by Fiona Lau at IFR; Additional reporting by Sijia Jiang; Writing by Julie Zhu; Editing by Muralikumar Anantharaman

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