[2019-10-29] Avalon Bitcoin Miner Maker Canaan Officially Files for $400 Million

[CryptoBry]

Not sure about their choice of country. Why would a Chinese mining company be filing for an IPO in America, especially with so much tension between the 2 companies, not sure why they wouldn't just go back to China, what does everyone think?

I am thinking of the same, why are these China-based companies are filing their IPOs in USA? I am referring to Bitmain and Canaan. Can be because these companies are not so keen and confident on their own government and that one day the government will eventually decide against Bitcoin mining? Now, if I am an investor, I would be wary putting my money on this company and similar ones. How will an IPO like this affect the Bitcoin market? I think there is no correlation whatsoever as the market right now is more under the pull of China, whatever China is saying and doing can be affecting the movement of Bitcoin and the whole cryptocurrency market. Maybe if there is one thing this IPO signifies it is the fact that Bitcoin mining remains to be a robust and lucrative industry to go into though the dynamics have changed a lot compared to the early years of Bitcoin's existence.

[malevolent]

I am thinking of the same, why are these China-based companies are filing their IPOs in USA? I am referring to Bitmain and Canaan. Can be because these companies are not so keen and confident on their own government and that one day the government will eventually decide against Bitcoin mining?

China has stronger capital controls than the US and the latter has stronger rule of law, doing an IPO abroad gives them more flexibility in managing their finances.

[jseverson]

I am thinking of the same, why are these China-based companies are filing their IPOs in USA? I am referring to Bitmain and Canaan. Can be because these companies are not so keen and confident on their own government and that one day the government will eventually decide against Bitcoin mining?

To be fair, Bitmain also tried filing an IPO in China (well Hong Kong, technically) but failed to do so. There were a lot of concerns about its approval from the start because of the lack of regulatory framework in the industry, as the link mentions. Maybe Canaan would rather not waste resources on something Bitmain has already failed?

Either way, why not the US? It has been far more open to the crypto industry as a country than China is, so they stand to raise more money.

[figmentofmyass]

Either way, why not the US? It has been far more open to the crypto industry as a country than China is, so they stand to raise more money.

it depends on the state of the bitcoin market. in these bearish conditions, canaan couldn't even raise 1/4 of its IPO target---the public launch was very much a flop. timing is everything!

the compliance costs of IPO'ing in the USA are pretty astounding too. underwriting, legal, auditors, exchange listing and SEC registration fees, incorporation and other organizational costs, etc etc.......we're talking millions of dollars. https://www.ipohub.org/costs-going-public/

there are jurisdictions with less red tape and regulatory costs/scrutiny. that's one angle to consider anyway.

[jseverson]

-snip-

Yeah, my statement was more of a why the US instead of China justification. I agree that the current market sentiment doesn't bode well for any crypto IPO, much a less mining related one with all the environment friendly narratives nowadays (the media is going to rip this to shreds as soon as they get a whiff). Not that mining is necessarily bad for the environment, just that the world seems to be stuck with that mindset, but I digress.

[bbc.reporter]

News update.

It appears that the expectations on this IPO did not meet the hype. Canaan raised less than 1/4 of what the company wanted.

Why did they do this during a bear market?



In November, it raised $90 million in its underwhelming IPO, slashing its original $400 million fundraising goal by 77.5%.

Source https://www.theblockcrypto.com/linked/50015/canaans-ipo-is-more-symbolic-than-substantial-to-the-crypto-industry-says-expert