Bitcoin Miner Canaan Seeks Funding Amid Revenue Decline

Canaan, a Bitcoin (BTC) miner, is in search of fresh funding in light of a decline in its revenue and net income.

The company, as stated in its Q3 2023 earnings report published on November 28, intends to conduct an at-the-market offering to sell $148 million worth of equity.

Canaan disclosed an agreement with an unidentified institutional investor the day prior to issue a maximum of 125,000 preferred shares at $1,000 each for a combined revenue of $125 million.

The company experienced a 55% decline in revenue to $33.3 million in the third quarter of 2022, primarily attributed to a reduction in the quantity of Bitcoin (BTC) mined and the sale of ASIC mining devices.

Additionally, the company experienced a decline in net income from $6.3 million to $110.7 million during the same period last year.

“In general, we have encountered heightened price competition and a discernible decline in purchasing power regarding demand, both of which have presented significant obstacles to our sales,” stated Canaan’s chairman and CEO, Nangeng Zhang.

The company projects that its revenue for the fourth quarter will remain relatively constant in comparison to the third quarter, owing to “difficult market conditions that affected the entire industry.”

Numerous Bitcoin miners initiated bankruptcy proceedings in 2022 as a result of escalating electricity expenses and declining BTC values, thereby impeding the sales of Bitcoin ASIC mining machines.

Nevertheless, market conditions have improved this year as a result of the Bitcoin price recovery and a decline in inflation.

Bitcoin miners earned an all-time high of $44 million in block rewards and transaction fees on November 13.