Should Canaan investors sell their shares?

Canaan investors

Canaan CEO Nangeng Zhang is urging Canaan investors NOT to sell their shares, but is that really the right decision?

Canaan, an early-stage venture capital firm, has been facing numerous problems since conducting its initial public offering (IPO). The company reported a net loss of over five million dollars in the first quarter of 2020, as its stock price continues to decline.

Canaan Partners, a 30-year-old firm that originally spun out of General Electric Capital, announced  3 years ago that it has closed on $800 million in commitments for its eleventh fund.

Canaan investors stuck between a rock and a hard place

Initially starting at almost nine dollars ($8.99), the price has declined by nearly 74 percent to reach 2.36 dollars, where it currently hovers.

Reportedly the drop in its price occurred due to two major reasons; the failure of its A1066 mining rig and the lawsuits against the company. The selling pressure was further increased by the fact that the company’s lockup period expired last week, allowing Canaan investors to sell their shares in a panic.

Twitter user @BTCKING555, who reveals insider reports about crypto companies, reported that Canaan CEO Nangeng Zhang was “begging” investors NOT to sell their shares after the lockup period expires. However, the user noted that many investors know that the company’s results in 2020 will be even worse. As a result, many investors were already preparing to sell their shares.

Canaan’s competitors might benefit from its misery

The price of bitcoin is rallying to charge above the ten thousand dollars mark while the network’s hash rate has also been increasing. This is prime time for mining rig manufacturers to gain customers, and Canaan’s fallout might aid its competition.

Bitmain, despite having its own issues, is still dominating the mining sector. Bitmain and its mining pools account for 35 percent of the Bitcoin network’s hashrate. With a competitor like Canaan dropping out, it will only add to Bitmain’s dominance.

Bilal Ahmed

Bilal Ahmed

Bilal Ahmed is a blockchain enthusiast and an avid reader who loves writing about ramifications of blockchain and cryptocurrencies. He believes in doing due diligence with facts before transmitting.

Related News

Hot Stories

Coinbase CEO rejects FTX's 'accounting error' claim
Ethereum price analysis: Bullish momentum continues as price reaches $1,265
Bitcoin price analysis: BTC/USD continues to surge as it breaks out at $17,082
ChainLink price analysis: LINK bearish at $7.3
Top crypto tweets of the day - December 5th

Follow Us

Industry News

Coinbase CEO rejects FTX's 'accounting error' claim
Will SBF testify before U.S. Congress on Dec 13th?
Self-custody: The new trend in Crypto?
Are crypto miners losing faith in Bitcoin? Over 10K BTC dumped
Coin Signals ordered to return funds to victims

Add Your Heading Text Here