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Canaan Inc.

Company NameCanaan Inc.
Stock SymbolCAN
Class PeriodFebruary 10, 2021 to April 09, 2021
Lead Plaintiff Motion DeadlineJune 14, 2021

On April 12, 2021, before the markets opened, Canaan announced its fourth quarter and fiscal year 2020 financial results in a press release. Therein, the Company reported a 93% year-over-year decrease in computing power sold and net revenues for the quarter, citing “a severe supply shortage” of “mining machine” chips during the quarter. The Company also revealed that older machines were sold for lower prices than the newer machines for which Canaan received pre-orders, despite prior statements that the price of bitcoin mining machines typically increased with the price of bitcoin, which had risen dramatically during the fourth quarter.

On this news, Canaan’s American Depositary Receipt (“ADR”) price fell $5.53, or 30%, to close at $13.14 per ADR on April 12, 2021, thereby injuring investors.

The complaint filed alleges that throughout the Class Period, Defendants made materially false and/or misleading statements, as well as failed to disclose material adverse facts about the Company’s business, operations, and prospects. Specifically, Defendants failed to disclose to investors that: (1) Canaan had experienced significant ongoing supply chain disruptions during the 4Q20; (2) the introduction of Canaan’s next-generation A12 series bitcoin mining machines had cannibalized sales of the older product offerings during the 4Q20; (3) as a result of the foregoing, Canaan’s 4Q20 sales and sales revenues had declined dramatically; and (4) as a result, Defendants' statements about its business, operations, and prospects, were materially false and misleading and/or lacked a reasonable basis at all relevant times.

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