Bitmain rival Canaan seeks up to $100 million through its IPO

This week, Bitcoin miner manufacturer Canaan Creative released more details about its impending NASDAQ initial public offering (IPO), per a Renaissance Capital blog post. Canaan, the world’s second-largest crypto miner producer, intends to raise about $100 million in its U.S. IPO on November 20.

Canaan would be the first significant crypto miner maker to go public in the traditional stock market. On Wednesday, the Hangzhou, China-based manufacturer of the Avalon miner series updated its IPO application with the U.S. Securities and Exchange Commission (SEC). It plans to offer 10 million American depositary shares (ADS) at a price range of $9 to $11.

An American depositary share (ADS) is a U.S. dollar-denominated equity share of a foreign-based company available for purchase on an American stock exchange.

At $10 per share, Canaan’s fully diluted market value would be $1.6 billion, with about 2.3 billion outstanding ordinary shares after the offering. According to the updated filing, each ADS would represent 15 Class A ordinary shares of Canaan. 

Canaan recently revealed that it took home a profit of $13 million on revenues of $95 million for the third quarter of 2019, but incurred a net loss of $45 million for the first half of 2019. In the IPO filing, the firm said it controlled 23.3% of the global crypto mining machine market share in 1H19, while Bitmain, which has also reportedly filed a U.S. IPO, took up 64.5% of the market. Canaan earns more than 99% of the revenue from crypto mining machines and related sales.

In Canaan’s initial IPO filing from late October, the company set a placeholder amount of $400 million for its IPO aspirations. The latest figure may still be revised before its final listing. The firm originally attempted a Hong Kong listing in 2018 before letting the application lapse. The South China Morning Post reported the city’s exchange and regulators deemed IPOs by cryptocurrency companies to be “premature.” Canaan had intended to raise as much as $1 billion in the share sale.

Canaan was founded in 2013 and booked $177 million in sales for the 12 months ended September 30th, 2019. The firm plans to list on the Nasdaq under the symbol CAN.

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