BTC Mining Equipment Giant Canaan Fails to Raise USD 100M (UPDATED)

IPO Mining

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Linas Kmieliauskas

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Linas Kmieliauskas

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June 26, 2023

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The second largest producer of Bitcoin mining equipment, China-based Canaan, has finally completed its initial public offering (IPO) after the third attempt, raising less than estimated. (Updates at 16:30 UTC: updates in bold).

While many have estimated that the company will raise USD 100 million at a USD 1.6 billion market capitalization, Canaan raised USD 90 million after pricing its U.S. IPO at the bottom of its marketed range (USD 9-11), Reuters data shows. 14 investors indicated an interest in 5% of the shares.

The shares started trading today on the Nasdaq exchange under the symbol CAN, making it the first pure-play public equity in the mining industry. In the first hours of trading, the price dropped from USD 12.6, to USD 8.6 per share.

CAN price chart:

The company originally filed for a USD 400 million offering in October, and had planned to raise as much as USD 1.5 billion in 2018.

“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,” according to Renaissance Capital.

Canaan posted USD 177 million in sales for the year September 2018-September 2019.

The company, which was founded in 2013, has listed a number of big-name underwriters on its IPO application, including Galaxy Digital and Citigroup, as well as Chinese investors, such as Huatai Securities and China Renaissance.

Meanwhile, the world’s largest player in this industry, Bitmain reportedly filed confidentially for a U.S. IPO last month, it added.