As per its previous plans, Canaan was looking to raise anywhere around $400 million but fell short by 75% of its target.
As previously reported by CoinSpeaker, China’s Bitcoin mining giant Canaan Creative conducted its IPO with its shares going public on the Nasdaq platform on Wednesday, November 20.
Well, things have certainly not gone the way Canaan thought and it looks like the decision to go public was all done in haste. In its filing to the United States Securities and Exchange Commission (SEC) Canaan marketed its shares for $9 to $11, as per the Bloomberg report.
Previously, Canaan planned to raise around $400 million from its public listing but it fell short by a massive 75%. As per Bloomberg, during its listing on Wednesday, November 20, Canaan could manage to sell only 10 million shares at $9 apiece. This shows that despite getting an entry on the Nasdaq index, Canaan failed to garner enough investor interest.
Furthermore, Canaan faced a major blow even before its IPO when one of its underwriters Credit Suisse backed-off from the deal. A source familiar with the matter said that Credit Suisse was “concerned whether the offering could secure sufficient orders.”
Previously, Canaan tried to go for a listing on the Hong Kong Stock Exchange. However, it failed big time as it turned out to be “premature” for the crypto mining company to go for a public listing.
But it is not Canaan alone who is facing the wrath of the market. Its major competitor Bitmain also met with a similar fate earlier. With last year’s crypto winter and massive price correction, crypto mining firms lost their sheen with time. During the peak of the crypto market in December 2017, crypto mining companies made heavy profits by selling their mining hardware across the globe.
Simultaneously, these companies also pushed for aggressive expansion of its operations citing high-demand back then. However, just within a year’s time, the crypto market corrected by a massive 80% thereby causing most miners to go out of business. The demand for crypto mining machines plunged massively leaving these companies dry of their funds.
The fundraising through the IPO was Canaan’s major attempt at reducing its piling debt, however, things don’t seem to have gone as per the plan.
The only good thing for the crypto mining companies currently is China deciding not to ban Bitcoin mining activity taking place in the country. China’s surplus hydroelectric power and availability of cheap electricity is a boon to the crypto miners and helps them cut down their mining costs.
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