Canaan Mining’s IPO in New York may raise only $100 million, at least based on recent edits to the prospectus. The company will aim to list on NASDAQ and become the first Chinese mining equipment producer to trade as a public stock.
Canaan May Reflect Worsened Sentiment About Crypto Investments
Just days after Canaan scheduled the IPO deadline for November 20, the success of the stock placement is put in question. Initially, Canaan Mining planned to raise as much as $400 million. Based on previous private placements, Canaan has been evaluated in the billions.
Dovey Wan, co-founder of Primitive Crypto, pointed out the fact that Canaan was not ready to raise the funds previously intended.
Rekt™ alert 🚨🚨🚨
Canaan Creative @CanaanInc1 updated its IPO file, adjusted the expected raise to $100M, much lower than the anticipated $200-400M range 🥴
AND its lead underwriter Credit Swiss also QUIT … 👀👀👀
— Dovey 以德服人 Wan 🗝 🦖 (@DoveyWan) November 14, 2019
Credit Suisse, the leading underwriter for the IPO, reportedly also left. The IPO problems arrive despite relatively robust results from Canaan for the past quarter. The company hoped to raise funds and go public a year after failing to list on the Hong Kong exchange.
The lower target for the IPO is seen as a sign of a worsened sentiment about cryptocurrencies and the activity of mining. Despite the growth in mining in 2019, there are still doubts the activity is viable. Additionally, the centralization of mining farms in China is seen as a risk factor.
Mining Profitability Highly Uncertain
At the moment, mining teeters on the brink of breakeven, depending on the BTC market price.