The BTC mining Equipment giant Canaan didn’t manage to raise the indented $100 million after finally completing its initial public offering during its third attempt. In our latest cryptocurrency news, we take a closer look at why this happened.
The China-based Canaan completed its initial public offering (IPO) and raised less than the initial estimates. While many believed that the company will raise up to $100 million at a USD 1.6 billion market cap, the BTC mining equipment giant raised only $90 million after pricing the US IPO at the bottom of the marketed range according to the Reuters Data. More than 14 investors indicated an interest rate of 5 percent in the shares.
The shares started trading today on the Nasdaq exchange with the symbol CAN which made the first pure-play public equity in the mining industry. During the first hours of the trading session, the price decreased from $12.6 to $8.6 per share. The company also filed for a $400 million offering in October and had planned to raise as much as $1.5 billion in 2018. According to Renaissance Capital:
“The #2 player in the space, Canaan has shown that it’s capable of being highly profitable, with a 61% net margin in the 1Q18. However, its performance is heavily influenced by Bitcoin prices; a price slump earlier in the year caused Canaan’s sales to fall 96% in the 1Q19.’’
Canaan posted up to $177 million in sales for the year September 2018/2019. The company founded back in 2013, listed a number of known name investors on its IPO application including Galaxy Digital and Citigroup as well as some major Chinese investors such as China Renaissance and Huatai Securities. In the meantime, the largest player In the industry Bitmain filed confidentiality for a US IPO in October.
As previously reported, Canaan has previously applied to the Stock Exchange of Hong Kong list but postponed the plans last year after the listing application lapsed. The sponsors of Canaan’s Hong Kong IPO included the CMB International Capital, Deutsche Bank, and Morgan Stanley.
The listing got lapsed mainly because concerns showed up by local regulators and the Stock Exchange of Hong Kong as well, about the company’s business model. A few bankers also expressed concerns that the business could be in trouble with the falling of the bitcoin prices and that it is not possible to forecasts how the financials of the company will turn out.
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