Canaan Records $148 Million in Losses for 2019

Canaan Creative, a Bitcoin mining hardware maker, has reported a net loss of $148.6 million for 2019, according to a filing with the Securities and Exchange Commission (SEC).

The regulatory filing was the first unaudited earnings report submitted by the company following its dull initial public offering (IPO) last year on a United States-based exchange, raising $90 million.

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The company detailed that since its IPO, it sold a total computing power of 10.5 exhashes per second (EH/s) – 20 percent of the total Bitcoin network’s hashrate growth last year.

The losses were reported on total yearly revenue of $204.3 million, compared to the previous year’s number of around $384 million.

This shows a significant decline in the company’s miner selling business.

Notably, the Chinese company’s poor numbers were due to its loss of $115.1 million in the last quarter of this year, compared to $10.6 million from the same period in 2018.

Decreasing demand for miners

Founded in 2013, Canaan sells computer equipment under the “Avalon” brand. According to its SEC filing, it controls 15 percent of the global market for bitcoin mining chips and computer equipment, which makes it the second-largest company in the sector following Bitmain.

Despite a surge in the sales in October and November, the volatility in Bitcoin prices resulted in a significant drop in volume in December, Nangeng Zhang, founder and CEO of Canaan, clarified.

“As a result of the impact of the COVID-19 outbreak, a widespread health crisis that adversely affected general commercial activities, the economies, financial markets, as well as the cryptocurrency market activities, we have lowered our expectations for business in the year of 2020,” the report stated. “For the first quarter of 2020, the Company expects total revenues not less than RMB60 million (around $8.5 million).”

Meanwhile, the company was also slapped with a class-action lawsuit in the US for misleading its investors by providing false information about the financial health and operation status of the company in the IPO filings.

While Canaan is struggling with its business, two exchange-listed Bitcoin miners – Argo Blockchain and Hut8 – posted record numbers recently.

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