Nasdaq-listed Bitcoin mining tools maker, Canaan (CAN) had its IPO in November final yr. At the moment, it was buying and selling at $8.9 and since then, it misplaced about 64% of its worth and is at present down at $3.20.
From March 16, $CAN has been buying and selling beneath $Three going to its lowest at $2.81 on March 17, a number of days after the Bitcoin worth crashed. Compared, throughout this time, bitcoin has been down solely 7.7%, at present buying and selling round $6,900.
“Choose-and-shovel play not likely going as deliberate. CAN has been a catastrophe since IPO,” said analyst with pseudonym Ceteris Paribus.
Loss in 4Q19 however extra incoming in 2020
On Thursday, the China-based firm additionally launched its unaudited earnings report. Canaan bought a complete of 10.5 EH/s computing energy, contributing 20% to the Bitcoin community’s computing energy final yr. The agency reported a web lack of $114.7 million in This autumn of 2019 and $148 million for 2019. This has been half of the corporate’s income generated in 2018.
In an earnings name on Thursday, Nangeng Zhang, founder and CEO of Canaan mentioned the agency recorded an uptick in gross sales in October and November however a “appreciable drop” in December. The report states,
“On account of the impression of the COVID-19 outbreak, a widespread well being disaster that adversely affected basic industrial actions, the economies, monetary markets, in addition to the cryptocurrency market actions, we now have lowered our expectations for enterprise within the yr of 2020.”
“For the primary quarter of 2020, the Firm expects complete revenues not lower than RMB60 million [$8.5 million].”
The report additionally talked about the rising ratio of the “value of revenues” — that features the price of uncooked materials, manufacturing, logistics, investories, and write-downs of prepayments — for the sale of its bitcoin mining tools over the previous years, which contributed to dropping profitability.
The price of revenues may be elevated as a result of soar within the worth of chip know-how, similar to Avalon’s newest chip prices over 25% greater than its earlier model and over 110% greater than the earlier one.
Amidst these losses, Canaan can also be hit with a lawsuit by an investor who accused the corporate of constructing deceptive data and violating US securities legal guidelines. The category-action lawsuit has a deadline of Could 4, 2020.