Canaan Seeks $148M Injection Amidst Profit Plunge, Predicts Static Q4 Despite Market Recovery
Summary:
Bitcoin mining company Canaan is seeking an additional $148 million in funding amidst declining profits and revenue. The company's Q3 2023 report shows a 55% drop in revenue since the same period in 2022, as well as a substantial net loss. The firm is facing tough market conditions and competitive pricing, which have impacted sales. Despite numerous Bitcoin miners filing bankruptcy in 2022 due to high costs and low Bitcoin prices, there appears to be a market recovery underway, with Bitcoin miners earning a historic high of $44 million in November.
Canaan, a Bitcoin mining company, is on the hunt for additional funding in the face of dwindling profits and revenue. On November 28, they revealed in their Q3 2023 earnings report that they aim to raise $148 million via an at-the-market offering. The announcement came a day after the firm confirmed a deal with an unidentified institutional investor for the issue of up to 125,000 preferred stocks at $1,000 each, amounting to a total of $125 million. The company's revenue saw a 55% dip from the same period last year, hitting a low of $33.3 million because of fewer Bitcoins mined and a decrease in the sales of ASIC mining rigs. A hefty loss of $110.7 million replaced last year's net income of $6.3 million. Nangeng Zhang, Canaan's chairman and CEO, remarked on the stiff competition in pricing and the significant drop in purchasing power hindering sales. The firm predicts its Q4 revenue will stay static compared to Q3, tracing back to the tough market conditions prevalent across the board. Several Bitcoin miners announced their bankruptcy in 2022 due to sky-high electricity costs and low Bitcoin prices, leading to a disturbance in the sale of Bitcoin ASIC mining rigs. However, the market situation appears to be recuperating with relaxed inflation and a rise in Bitcoin values. On November 13, Bitcoin miners raked in a record-breaking $44 million through block rewards and transaction charges.
Published At
11/28/2023 4:07:31 PM
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