Chinese crypto mining rig maker Canaan files for $400 million US IPO

Hangzhou-based crypto mining equipment manufacturer Canaan Inc. is looking to raise $400 million in a US initial public offering (IPO), according to the company’s filing on Monday.

Why it matters: This is the mining equipment giant’s third attempt to go public. The company previously attempted to float shares in Shanghai and Hong Kong, but both attempts fell through largely due to market uncertainties.

• Hardware suppliers were hit hard when bitcoin prices took a nosedive last year, making mining farms unable to turn a profit.
• Canaan is the world’s second-largest maker of bitcoin mining machines by computing power sold in the first half of 2019, according to data from Frost & Sullivan cited in the company filing. Beijing-based Bitmain is the largest.
• The market began to show signs of warming up in June. Bitcoin prices rallied over the weekend, surpassing the $10,000 mark after President Xi Jinping’s endorsement of blockchain technology last week.

Details: Canaan filed with the US Securities and Exchange Commission (SEC) for its initial public offering on Monday, following reports in July suggesting the company filed for its US IPO confidentially.

• The company plans to list on Nasdaq Global Market under the ticker “CAN.” The offer amount is a placeholder that will likely change.
• Credit Suisse, Citigroup, China Renaissance, and CMB International Capital are the joint bookrunners on the deal.
• The mining rig maker posted a loss of $45.8 million and net revenue of $42.1 million in the first six months of the year. For comparison, in the first half of 2018, the company posted a profit of $25 million and net revenue of $275 million.

Briefing: Mining giant Bitmain shifts IPO plans to the US

Context: Founded in 2013, Canaan specializes in blockchain servers and ASIC microprocessor solutions for bitcoin mining use.

• Bitcoin’s price surge in the second half of this year led to a rise in demand for bitcoin mining rigs.
• Canaan competitor Bitmain, which has had its share of problems listing on public markets, is reportedly seeking to list in the US after its Hong Kong plans fell through.