Canaan Creative, one of the largest and most popular companies in the cryptocurrency mining space, had a rather good day yesterday as its stock saw a significant uptick.
The firm, which conducted a successful Initial Public Offering (IPO) last November, has seen its stock slide further and further into the red as the momentum from bitcoin’s rally began to wear off. This led to a sudden slump in share price for the mining giant. Although there were troubling signs for the firm’s IPO prospects, it eventually went public on the NASDAQ, and was only able to raise $90 million out of an expected $100 million.
A Turnaround in the Works?
It’s worth noting that the company’s initial investment haul from the IPO stood at $400 million. The fact that it still wasn’t able to raise its expected cume after such a significant cut was a troubling sign, and things only got worse from there. On the day of its IPO launch, Canaan’s stock went to a high of $13. In the coming days, however, the stock took a huge hit and cratered at about $5.25 a share.
Regardless, the firm has picked itself up and is now on what is looking like a rally. According to industry news source The Block, Canaan’s stock opened trading yesterday at about $4.42 and was able to close the day almost 100 percent up, trading at $8.04 per share.
The cause of this recent surge is still unclear, especially given how mining firms have been performing of late. However, it’s going to be music to investors’ ears nonetheless. Now, it’s up to see how long this rally can last. Canaan has been in a tight race for market supremacy with Bitmain- another mining giant from China. Last month, 8BTC reported that the firm would be launching a new application-specific integrated circuit (ASIC) in the first quarter of the year.
Perfect Time to Dethrone Bitmain
As the news medium explained at the time, the new chip will be much more efficient than previous models. With a 5nm manufacturing process, it is expected to improve on aspects such as operating performance, power output, and area scaling. The firm is also expected to scale the new chip better and much faster than it did with its 7nm chip, with the hopes that it will help boost its sales and give it the upper hand against Bitmain.
Bitmain itself isn’t doing so well. The company has had two attempts at an IPO rejected, and towards the end of last year, it experienced internal turmoil after company chief executive Jihan Wu ousted his long-time partner Micree Ketuan Zhan from the firm. Zhan, who remains the largest shareholder at Bitmain, has taken the fight for his firm to court, with the resolution of that yet to be seen.
Bitmain was also rumored to be working on cutting up to 50 percent of its entire workforce in preparation for the upcoming Bitcoin halving. Protests from workers rocked the firm upon the news breaking out, and even ousted company boss Zhan stepped in to criticize the move.