China’s Second-Biggest Bitcoin Mining Equipment Manufacturer Raises $90M in U.S. IPO
China-based bitcoin mining equipment maker, Canaan Creative raised $90 million in its U.S. Initial Public Offering (IPO), after selling the IPO shares at the bottom of its marketed range, reports Bloomberg on November 21, 2019.
Canaan Creative Raises $90 Million at IPO
Per the report, Canaan Creative was able to raise $90 million during its U.S. IPO conducted on November 20, 2019.
Reportedly, 10 million American depository shares were sold during the IPO, and each share was offered at $9.
However, filings with the U.S. Securities and Exchange Commission (SEC) reveals that the share’s marketed price was between $9 to $11, and as such, it sold at the bottom of its marketed value.
Canaan Raises Funds Lower than its Expected Returns
As reported by BTCManager, the China-based computer hardware manufacturer had initially filed to raise $400 million during its IPO but lost its lead underwriter, Credit Suisse Group AG, before the offering.
What’s more, the firm had touted the idea of raising $2 billion in early 2018 before it was lowered to $400 million.
The offering was reportedly led by Citigroup Inc, CMB International Capital Ltd, and China Renaissance Holdings Ltd and the shares will start trading on November 21, 2019, on the Nasdaq Global Market under the symbol CAN.
Before the offering, Canaan had filed to list in Hong Kong, but the city’s exchange noted that it was still premature for crypto-related businesses to go public in the Asian financial markets.
Canaan’s First Successful IPO After Two Failed Attempts
It is, however, worth noting that this is the first time Canaan has successfully launched an IPO after two failed attempts to go public in 2016 (China) and 2018 (Hong Kong), respectively.
The cryptocurrency mining equipment maker’s previous attempts proved futile due to the stock exchange’s and regulators’ uncertainties about its business model.
However, it did not deter the firm since it forged ahead to file confidentially for a U.S. IPO in July 2019.
Over and above that, an amendment form from November 5, 2019, submitted by Canaan as part of its registration to conduct an IPO in the U.S., shows that the firm had made a net profit of 94 million yuan (about $13 million) in the Q3 of 2019.
Nonetheless, Canaan made a net loss of $31 million in 2019, despite generating a revenue of about $134 million between January 2019 to September 2019.
On the other hand, bitcoin’s price has spiked to twice its value from the start of the year, which has increased the demand for bitcoin mining machines.