Canaan Lets its IPO Application Expire

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It appears as if crypto mining TVs aren’t as popular as Canaan had once hoped. In a rather strange move, the crypto mining hardware manufacturer has decided to let its IPO application expire. The application with the Hong Kong Stock Exchange lapsed late last week after the stock exchange asked for more information, such as info regarding its business model and future prospects. After failing to provide this information by the deadline, the Hong Kong Stock Exchange let the application expire and closed the application.
Canaan can reopen the application at any time by submitting the latest round of financial reports and data, but it’s not looking good for the hardware firm.

Tough Times for Miners

It hasn’t been an easy few months for crypto mining firms, due to the increasing network hash rate and declining price of Bitcoin. Miners have been suffering from a deluge of poor circumstances in the crypto world, and have now been hit by import tariffs from a US/China trade war.
Canaan had noted a decline in orders for its equipment from the US following Trump’s new tariffs, but it’s yet to be seen the extent of the damage this has caused to the firm.

Mining Firms Opting for IPOs

Crypto mining firms have been opting for IPOs recently, due to the fact they give investors a quick and easy way to gain exposure to cryptocurrencies indirectly. Rather than heading to a crypto exchange to buy Bitcoin – or any other crypto for that matter – investors can simply invest in a crypto mining firm via their existing stock trading platforms.
Hut 8, Argo, and Bitmain have all opted for the IPO route over an ICO and the move is paying off. In an exclusive interview with BitStarz News, Andrew Kiguel – Hut 8 CEO – said,

“our first fundraiser at Hut 8 was $38 million CAD, attracted close to $1 billion of interest from around the world just for that round.”

This highlights the demand from traditional investors to gain a slice of indirect crypto action.

Is This the End of Canaan?

For a firm to let its IPO application expire something serious has to be wrong. It takes a lot of time and effort to submit an application, so it wouldn’t have dropped it for no reason. There is a good chance that the directors saw some worrying data – or poor sales forecasts – that would hinder the IPO process and value the firm at a much lower level than it wants.
The initial valuation for Canaan came in at close to $2 billion, but subsequently that was reduced to $400 million. There is a high chance that the final valuation after its IPO could be closer to $200 million, following poor sales of its crypto mining TV. However, until more data is released, we will never know the true cause.
This could very well be the end for Canaan as we know it. Dropping an IPO application will raise eyebrows around the investment world, and if it proceeds to renew the application next year, investors will be extra cautious. Alternatively, Canaan could have found a private source of funding and decided not to go ahead with the IPO after all. Only time will tell on this one, but there is a good chance we could see one less crypto-related hardware manufacturer by this time next year.