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BY CNA team - November 16, 2018

News 0

Canaan Creative’s IPO application lapses

Canaan Creative’s IPO plans stymied by questions over business model and outlook
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Canaan Creative has let the application for an initial public offering (IPO) lapse on questions over the company’s business model and prospects given the prolonged slump in bitcoin’s price.

The Beijing-based bitcoin mining rig producer filed for a Hong Kong IPO in May and targeted to raise US$400mil, down considerably from the US$2bil that sources said it wanted to raise initially. The application lapsed on Nov 15.

Reuters says in a same-day report that this also casts doubt on the prospects of the other Chinese bitcoin mining rig producers that have filed for Hong Kong IPOs.

Hangzhou-based Ebang filed for an IPO in late June followed by Beijing-based Bitmain in late September.

The news wire says sources close to the Canaan deal revealed that the stock exchange and the regulators had many questions over the company’s business model and prospects.

They say that the IPO will not happen this year since there was no update from the stock exchange for a listing hearing.

They add that the company will refile for the IPO with updated financial information if it plans to resume the listing process.

Another source close to the Ebang deal says the company’s IPO is likely not to happen this year either.

A separate source says Bitmain is still in the process of answering questions from both the stock exchange and the Securities and Futures Commission.

The bitcoin mining rig producers have seen their sales affected following the slump in bitcoin’s price.

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