Canaan plans to raise $100 million in IPO, sources say the amount may be reduced due to poor roadshow results

Author: Xi Xixi

At 17:00 on November 3rd, local time in the United States, according to the official website of the U.S. Securities and Exchange Commission (SEC), mining machine manufacturer Canaan Creative once again updated its primary prospectus. According to the updated content, Canaan Technology plans to issue 10 million ADSs, with the price of each ADS ranging from $9 to $11, so the total amount of funds raised is between $90 million and $110 million. There is a certain gap compared with its highest total amount of $400 million.

An investment banker told Caijing.com Chain Finance that Canaan Creative completed its roadshow yesterday and is expected to be officially listed on the Nasdaq on November 20. He said: "A roadshow is a presentation by a company that is about to go public to investors, because not everyone likes to read a prospectus. The roadshow means that Canaan has obtained the approval of the SEC."

In addition, Xiaocong also released a Canaan roadshow PPT in its report this afternoon.

Although the latest prospectus is still an informal version of the prospectus, and the maximum amount of funds raised on the first page is still US$400 million, this prospectus further clarifies the specific fundraising scale.

According to the prospectus, each ADS represents 15 Class A common shares, and a total of 150 million Class A common shares are issued, including 2,015,597,778 Class A common shares and 356,624,444 Class B common shares (if the underwriters fully exercise the over-allotment option, the number can reach 2,038,097,778 Class A common shares and 356,624,444 Class B common shares).

In addition to the fact that the amount of funds raised was lower than market expectations, there were more obvious changes in the list of underwriters. Except for Citi, China Renaissance Capital, CMB International, Galaxy Digital, Huatai Securities, and Tiger Securities, which remained unchanged, Credit Suisse, which had previously been the top underwriter, did not appear in the list of underwriters in this new prospectus. In addition, Haitong International was added.

As for why the amount of funds raised was lower than market expectations, a person close to Canaan Creative told Caijing.com.cn Chain Finance that only US$100 million was raised so far. The main reason may be that yesterday’s roadshow may not have been as good as they expected, and the on-site response was not very good.

Caijing.com reporter sought confirmation from Canaan Creative Co-Chairman Kong Jianping on the news. As of press time, the other party had not responded.

Some industry insiders also analyzed that there may be another reason: the listing of new shares generally dilutes the shares of original shareholders, and Canaan may feel that it does not need to raise so much funds and sell so many shares at present.

At noon today, Xueqiu blockchain analyst Kui Dong posted on Weibo: "I just received a message from friends at Tiger Securities. Tiger Securities has officially opened the new share subscription channel for Canaan Creative (CAN) half an hour ago. From the new share subscription page, we learned that Canaan Creative's US stock IPO confirmation time is November 20, and the expected number of shares to be issued is 10 million, with a price range of 9~11USD. This listing of Canaan Creative will become China's first mining machine manufacturer listed in the United States."

According to the subscription information from Tiger Brokers, Canaan Creative is expected to be listed on December 21, and the expected subscription period for new shares is from November 14 to November 19. The minimum subscription quantity is 100 shares, and the minimum subscription amount is US$1,320.