Bitcoin Miner Maker Canaan Loses $5.6 Mln in Q1 as Demand for Mining Equipment Wanes

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Fri, 05/22/2020 - 14:35
Alex Dovbnya

Canaan’s mining equipment sales infected by the virus as the company sees a quarterly net loss of $5.6 mln

Cover image via stock.adobe.com
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Bitcoin mining hardware manufacturer Canaan has just unveiled a net loss of $5.6 mln in its Q1 earnings report

Canaan had to lower the average selling price of its mining unites per TH/s by about 50 percent.

In such a way it was able to boost its computing power sales, which allowed the company to increase its quarterly revenue by 44.6 percent compared to the previous year to $9.6 mln.

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A double whammy

One of the biggest players in the global mining industry wasn’t immune to the pandemic that negatively affected Canaan’s sales, according to the company’s CEO Zhang Nangeng. 

This, coupled with the March crypto market crash, delivered a substantial hit to the Chinese mining equipment manufacturer. 

The freshly published earnings report also sheds light on Canaan’s dwindling cash pile that decreased from $71 mln to Q4 2019 to $37 mln in 2019. Nangeng attributes this drop to its recent investments to the tune of $24.5 mln:    

The decrease was mainly due to higher short-term investments as the Company invested RMB173.4 million (US$24.5 million) in short-term investments as of March 31, 2020.

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Mining Tech Giant Canaan Inc. Fails to Raise 25% of Initial IPO

No outlook for 2020

Canaan became the first blockchain company to make an IPO debut on Nasdaq back in October despite being abandoned by Credit Suisse, its key underwriter. Back in March, it was taken to court over misleading financial statements.  

Like every publicly traded company, Canaan usually gives analysts guidance for the following quarter. However, this wasn’t the case in the Q1 report that offers a rather grim look at the company’s business. 

Earlier this year, Canaan reported a cumulative $148 loss in Q1 in 2019.

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About the author

Alex Dovbnya (aka AlexMorris) is a cryptocurrency expert, trader and journalist with extensive experience of covering everything related to the burgeoning industry — from price analysis to Blockchain disruption. Alex authored more than 1,000 stories for U.Today, CryptoComes and other fintech media outlets. He’s particularly interested in regulatory trends around the globe that are shaping the future of digital assets, can be contacted at alex.dovbnya@u.today.

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