Canaan Creative, known simply as Canaan (CAN), is a China-based computer hardware manufacturer, is facing a securities class action lawsuit which was filed on behalf of investors who purchased Canaan Inc securities. The Schall Law Firm, a litigation firm that specializes in shareholder rights, reminded Canaan investors about the lawsuit filed in the united states district court for alleged violations against the Securities Exchange Act of 1934 and Rule 10b-5 promulgated by SEC. CAN stocks saw a decline adjacent to the reminder of the lawsuit.
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In accordance to the complaints, CAN had failed to disclose to the shareholders, considerable supply chain disruptions during the 4th quarter of 2020. Furthermore, Canaan failed to mention a reduction of sales of their old product after introducing their latest-gen A12 BTC mining machines due to which sales had a staggering fall in the 4th quarter of 2020.
At last check, in premarket trading, CAN stock declined, 7.79% at $12.55. CAN shares closed the last session at $13.61, increasing 6.91% or $0.88, with shares of the company fluctuating between $12.10 and $13.98 throughout the day. For the last six months, the stock has soared a staggering 623.94%
Canaan’s products are primarily used by bitcoin miners, with the crypto-currency trend on the rise. However, the company generated$5.9 million in revenue in the 4th quarter of 2020, which accounted for an 82% decrease year over year. At the present stage, CAN has secured $174 million worth in contracts, due to which it will run at capacity for full-year 2021, however, cannibalized sales of the old product has halted further growth for the company
Mr. Nangeng Zhang, Chairman and Chief Executive Officer of Canaan, commented, “We have changed our operations model in 2021. Previously we were selling bitcoin mining machines mostly to individual mining operators who may not have longer-term planning. In late 2020, we shifted our client base to mostly publicly traded companies and bitcoin-focused investment funds which tend to place sizable orders with longer-term commitment. As a result, we can now forecast our revenue much more precisely”.
The semiconductor company predicts to generate a minimum $61 million in the first quarter of 2021, keeping in line the production orders due to high demands for cryptocurrency hardware, with the company focusing heavily on research and development of advanced technology, such as AI chips.
Canaan Incexpects its revenue will have an incredible rise in 2021 due to the increasing trends in cryptocurrency. This forecast depicts the Company’s current outlook on the market, which are subject to changes, due to the volatility of this business. However, with high demand of its product, Canaan will be manufacturing its products at capacity, throughout the rest of 2021.