Stocks of Bitcoin mining machine manufacturer Canaan Inc. rallied - and then plummeted - in its first trading session before closing the day a penny below the company's initial offer bid of $90 million.
The American depository shares of Canaan Inc wrapped up trade in New York on Thursday at a price of $8.99. Earlier, the company's shares rose by as much as 44 percent and dropped by as much as 8.8 percent after Canaan Inc sold 10 million shares for $9, pricing them at the bottom of the range.
According to its latest disclosures, the Hangzhou, China-based company lost its sole underwriter, Credit Suisse Group AG, before its initial public bid with the Securities and Exchange Commission. Canaan had estimated the scale of the IPO at $400 million earlier.
Twenty-nine companies in mainland China and Hong Kong have generated a total of $3.34 billion in IPO in the United States for 2019, based on figures released by Bloomberg, IPOs accounted for almost 50 percent of the amount from the same time last year.
On a weighted-average basis, the listings for this year fell by 9.6 percent. This compares to an overall increase of 7 percent for all US listings and an increase of 15 percent for the S&P/BNY Mellon China ADR Index.
Before the exchange of the region suggested that it was "premature" for crypto-related businesses to go public in the Asian financial hub, Canaan lodged a petition in Hong Kong. While Wednesday's Bitcoin has more than doubled to over $8,000 this year, its value in December 2017 is less than half of its all-time high.
Citigroup Inc., China Renaissance Holdings Ltd. and CMB International Capital Ltd. led the company's initial offering. The securities are traded under the name CAN on the NASDAQ Global Market.
Canaan Inc. is the world's second-largest manufacturer of BTC mining rigs. Its market share was estimated at 22 percent of ASIC hash power sold in the first half this year. Bitmain, on the other hand, accounted for 65.2 percent of the hash power sold during the same period.
The company has shown enormous losses despite these facts. Since 2018, their cash flows have been negative. Canaan had a net loss of $48.2 million in the first half of 2019, according to their filing.
The organization had intended to accelerate the production of Artificial Intelligence applications for ASICs, but the money generated from the IPO could only fund one year of losses given the current situation.
