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Bitcoin Manufacturer Canaan’s Q1 2023: $55.2M Revenue But A $47.5M Loss

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Canaan, a prominent manufacturer of Bitcoin mining machines, recently disclosed its financial report for the first quarter of 2023. The report reveals that the company generated revenues of $55.2 million during this period. However, despite the positive revenue figure, Canaan experienced a gross loss of $47.5 million.

To align it’s reporting currency with its operations, Canaan switched from using the Renminbi to the U.S. dollar as of January 1, 2023. This change was implemented retrospectively, enabling a more accurate representation of the company’s performance over time.

During the first quarter of 2023, Canaan sold a total hashrate of 4.2 million Thash/s, a significant increase compared to the 1.9 million Thash/s sold in the previous quarter of 2022 but slightly lower than the 4.3 million Thash/s sold in the same period of 2022.

Despite the challenging start to the year, Canaan’s Chairman and CEO, Mr. Nangeng Zhang, remains optimistic about the company’s future. 

He expressed confidence in their long-term prospects and emphasized their commitment to research and development, production capabilities, and customer satisfaction. 

Additionally, Canaan intends to expand its mining strategy, diversify its operations across multiple countries, and maintain a solid financial position.

Canaan’s Bitcoin Holdings & Cash Position

Canaan’s CFO, Mr. James Jin Cheng, highlighted the industry-wide reduction in selling prices and unforeseen delays in payment and shipment, which resulted in a contraction in sales revenue. 

However, the company narrowed its operating loss by 31.4% through diligent cost and expense control.

The financial results for the first quarter of 2023 revealed a decrease in product revenue compared to the previous quarter and the same period of the previous year. 

On the other hand, mining revenue increased by 3.3% from the previous quarter and 130.2% from the same period in 2022.

Canaan incurred various costs during this period, including product, mining, and operating expenses. Despite recording a gross and net loss of $84.4 million, the company remains determined to overcome its challenges in the first quarter and expects a positive trajectory moving forward.

As of March 31, 2023, Canaan held 623 bitcoins with a carrying value of $13.4 million. The company’s cash and cash equivalents amounted to $72.0 million, compared to US$101.6 million at the end of December 2022.

With 159,432,773 American depositary shares (ADSs) outstanding, each representing 15 Class A ordinary shares, Canaan aims to leverage its cutting-edge semiconductor design capabilities to contribute to the growth of Bitcoin adoption and benefit society as a whole.

While the first quarter of 2023 presented challenges for Canaan, the company remains resilient and focused on improving its performance and financial position in the evolving Bitcoin mining industry.

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Bitcoin Mining Manufacturer Ebang’s $100 Million IPO is a Risky Venture Amidst COVID-19 Disruption

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Over the past year, the prospect of a Bitcoin mining IPO has been put forward in the industry by reputed mining organizations such as Bitmain and Canaan. With both the organizations failing to gain sufficient traction in the market, according to reports, another former player is now trying to test its luck in the water again.

According to an April 24th filing with the U.S Securities and Exchange Commission, Ebang International Holdings, a lead manufacturer of BTC mining equipment is trying its luck for the second time to go public, but with a relatively smaller target that last time. The filing suggested that Ebang had filed for a $100 million initial public offering (IPO) with the SEC.

The filing additionally mentioned that the Chinese Firm will be under the ticker symbol of EBON on the New York Stock or Nasdaq.

Earlier, it 2018, Ebang’s first attempt was rather ambitious as it failed to go public on the Hong Kong Stock Exchange when the company estimated that it would go on to proceed with an IPO estimated to be around $1 billion.

According to the filing, Ebang had generated more than 80 percent of its revenue from making mining equipment in 2019. It earned over $105 million in revenue in 2019 however it was down by 66 percent from 2018. Its loss in 2019 was about $41.4 million in comparison to the profits in 2018.

Following the footsteps of Canaan?

Last year, Canaan Inc. made its debut on NASDAQ, on the 22nd of November, a few days after it was reported that the Bitcoin mining equipment manufacturer raised over $90 million in its U.S IPO. Canaan’s shares, priced at $9.00 per share, had been approved by NASDAQ Global Market it was traded under the symbol ‘CAN.’

Before successfully launching in the US, the mining organization had attempted to go public in Hong Kong, but their plans were dismissed by the regulators as the lawmakers were skeptical and very reluctant to authorize a digital asset company into public listings.

Ebang is currently taking a similar path after failing to receive its clearance from the Hong Kong Exchange back in 2018.

However, it is important to note that Canaan’s endeavours in the United States have been far from profitable, and the mining giant’s shares had plummeted by 40 percent in the 2nd week of December, right after their IPO.

With the ongoing COVID-19 pandemic, Ebang is playing a risky game with its IPO as the timing is far from ideal. The outbreak has resulted in a global disruption of the social and economic activities around the world, raising major question marks against Ebang’s IPO success.