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- The IPO of Canaan did not bring the desired success.
- The strategic direction of the company was difficult.
- It is now planning to buy back shares valued at $ 10 million.
Most recently, Canaan Inc hit the headlines because investors joined forces in a class action lawsuit. Now the ailing company wants to buy back its own shares in order to stabilize the situation.
A total of up to 10 million US dollars will be used for this. In July one had separated from 4 managers, as the magazine “The Block” reported. The buyback can take place between September 22, 2020 and September 22, 2021. Accordingly, the company can freely choose the time, volume and purchase price. Only the possible maximum amount is capped.
Although the company was able to overtake its competitor Bitmain with its own IPO, it was not possible to take advantage of the successful start. The shares were offered for $ 9 at the time and were taken in total $ 90 million a.
The price hovered around $ 2 for the past month after bouncing back slightly in May. Already a relatively short time after the IPO, the share showed weakness and collapsed by around 50 percent in November 2019.
In this context, the Investors hurt too and accused the company of having provided false information. Which should have led to a wrong valuation before the IPO.
Bitcoin mining industry remains a hot spot
While Canaan is in the process of minimizing damage, competitor Bitmain suffered a defeat in court. Bitmain believed that three former employees had violated a non-compete clause.
These are three co-founders of the mining pool Poolinwho were sentenced to fines in the course of this. However, the court rejected an additional action for damages. Bitmain attempted to assert $ 10 million each against each of the three defendants.
The court found the evidence to be inadequate. Accordingly, Bitmain could not prove that the damage actually occurred in this amount.