Bitcoin (BTC) miner Canaan is seeking new capital amid declining revenue and profits.
According to the third quarter 2023 financial report released on November 28, the company is seeking to sell US$148 million in equity through market issuance. The day before, Canaan Ventures announced that it had reached an agreement with an unnamed institutional investor to issue up to 125,000 preferred shares at a price of US$1,000 per share, with total proceeds of US$125 million.
Compared to the third quarter of 2022, the company’s revenue fell 55% to $33.3 million due to lower Bitcoin (BTC) mining volumes and a lower number of ASIC mining rigs sold. The company also had a net loss of $110.7 million, compared with a net profit of $6.3 million in the same period last year.
“Overall, we are facing intensified price competition and significantly weaker purchasing power on the demand side, which poses severe challenges to our sales,” said Zhang Nangeng, chairman and CEO of Canaan. Conditions are challenging,” and the company expects fourth-quarter revenue to be roughly in line with the third quarter.
Several Bitcoin miners filed for bankruptcy in 2022 due to soaring electricity costs and falling Bitcoin prices, disrupting sales of Bitcoin ASIC mining machines. However, market conditions have improved this year due to easing inflation and a rebound in Bitcoin prices. On November 13, Bitcoin miners received $44 million in block rewards and transaction fees, a record high.
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