Two executives of bitcoin mining rig maker Canaan, Nangeng Zhang and James Jin Cheng, announced their intent to jointly purchase at least $2 million worth of company shares, believing that the company is undervalued despite a significant revenue decline. Canaan’s total revenues decreased by 67.5% in 2023, dropping from $651.5 million to $211.5 million. The executives expressed confidence in the company’s progress, particularly in manufacturing mining rigs and fulfilling sales orders, including bulk orders from public company customers. They highlighted advancements in next-generation mining machines and ongoing research and development.
Canaan, a provider of high-performance computing solutions, was established in 2013 and specializes in ASIC high-performance computing chip design, research and development, manufacturing, and software services. Under the leadership of Nangeng Zhang, the company achieved a milestone in shipping the world’s first batch of mining machines with ASIC technology in Bitcoin’s history. Despite the decline in revenue, the company completed its initial public offering on the Nasdaq Global Market in 2019. Zhang emphasized the potential for emerging opportunities in the Bitcoin ecosystem following the recent fourth halving event on the Bitcoin network.
Despite the ongoing bull market in the cryptocurrency space, demand for Bitcoin ASIC miners and servers has remained subdued, leading to a revenue decrease for Canaan in the fourth quarter of 2023. The company reported a revenue of $49 million, marking a 16% decrease compared to the same period the previous year. Canaan also disclosed a widening net loss of $139 million, attributing the revenue decline to selling ASICs at lower prices relative to the market throughout the year. The company’s annual report for 2023 revealed a net loss of $414.2 million, compared to a net income of $69.9 million in 2022.
The revenue decline was mainly due to a decrease in the average selling price of Canaan’s Bitcoin mining machines on a per-Thash basis, dropping from $40.8 per Thash in 2022 to $8.9 per Thash in 2023. This decrease resulted from soft demand and a price drop in computing power throughout the year. Despite the revenue decline, the company’s mining revenue amounted to $34 million in 2023, slightly higher than the $32.5 million recorded in 2022. Canaan continues to focus on streamlining manufacturing processes, developing next-generation mining machines, and conducting research and development to drive growth and innovation within the Bitcoin ecosystem.
The initiative by Canaan’s executives to purchase company shares using personal funds highlights their confidence in the company’s long-term prospects and the belief that it is currently undervalued in the market. The decision follows the recent fourth halving event on the Bitcoin network, which is expected to create new opportunities in the Bitcoin ecosystem. Canaan’s commitment to advancing technology, manufacturing high-performance computing solutions, and driving innovation in the cryptocurrency space is evident in their efforts to develop next-generation mining machines and expand their product offerings. The company remains optimistic about future growth potential and is focused on addressing challenges to improve financial performance and enhance shareholder value.
In conclusion, Canaan’s executives Nangeng Zhang and James Jin Cheng are optimistic about the company’s future and are confident in its ability to navigate challenges and capitalize on emerging opportunities in the cryptocurrency space. Despite a revenue decline in 2023, Canaan has made progress in manufacturing mining rigs, fulfilling sales orders, and developing next-generation mining machines. The company’s focus on innovation, research, and development positions it well for long-term success and growth within the Bitcoin ecosystem. By investing personal funds in company shares, Canaan’s executives demonstrate their commitment to the company’s mission and vision, driving shareholder value and sustainable growth in the competitive cryptocurrency market.
