Beijing time, at 22:30 on November 21st, the first mining machine stock, Canaan Zhizhi will be listed on NASDAQ in the United States, and a bell-ringing ceremony will be held to become the "first global blockchain stock" in the true sense .

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1. IPO near-miss issue priced at $9

On October 28, US time, mining machine manufacturer Canaan Zhizhi submitted an IPO prospectus to the US Securities and Exchange Commission (SEC).

At 6 am on November 14th, Beijing time, Canaan updated its prospectus for the second time, confirming that it will issue 10 million ADSs, priced at US$9-11 per share, and the amount of funds raised will be between US$90 million and US$100 million. It is lower than the 200 million or 400 million US dollars originally thought by the outside world.

According to the latest news from Bloomberg on November 21, Canaan finally sold 10 million American depositary shares at the low end of the issue price range of US$9, raising a total of US$90 million.

According to the prospectus, Jianan Zhizhi made equity changes before and after the IPO. Before the IPO, Li Jiaxuan held 16.2%, Zhang Nangeng held 16%, Kong Jianping held 12.1%, and Sun Qifeng held 5.8%.

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Changes in shareholding before and after IPO / Mapping Bplus

In this IPO, Canaan’s underwriters include Credit Suisse, Citigroup, Huaxing Capital, CMB International, Galaxy Digital Advisors LLC, Huatai Securities and Tiger Securities International. Among them, GalaxyDigital Advisors LLC is a broker-dealer under Galaxy Digital, an encrypted asset investment bank.

However, there was also a discordant episode in the process. Credit Suisse, the former No. 1 lead underwriter, has now withdrawn from the ranks of underwriters.

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List of underwriters for Canaan’s prospectus / Drawing Bplus

It is worth noting that Canaan’s previous financial situation was not very optimistic, which is also one of the reasons for the negative voices.

Canaan’s prospectus shows that in the first three quarters of this year, Canaan Yunzhi’s total revenue was approximately 960 million yuan, a 60.5% decrease from the total revenue of 2.43 billion yuan in the first three quarters of 2018; the net profit was approximately -240 million yuan, compared with In the first three quarters of 2018, the net profit of 150 million yuan fell by nearly -260%.

However, in the third quarter of this year, Canaan’s performance has actually improved.

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Company revenue data over the years / chart Bplus

At 10:30 tonight, Canaan Zhizhi, whose stock code is "CAN", will officially open in the US stock market. This is not only a moment for Canaan Yunzhi to realize its dream, but also a carnival night for the entire blockchain industry.

Shao Jianliang, General Manager of Canaan’s Blockchain Division, posted on Weibo an edited video of Canaan’s ringing the bell at Nasdaq on November 21 and said: This 30-second video has witnessed the blockchain The birth of a new species in the industry and the birth of a listed company represent the maturity of an industry. The hard work of Canaan Technology over the past 6 years is finally about to usher in a bright moment, and we will witness it in New York tomorrow!

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2. Strive for transformation after failing three times

In 2015, Kong Jianping and Sun Qifeng joined Canaan Yunzhi with 7.6 million and 1.4 million through Shuxin Investment and Pete Thiel respectively. After four years, before going public in the United States this year, the two accounted for 12.1% and 5.8% of the shares respectively .

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Kong Jianping at the Wuzhen Blockchain Conference/Graph Source Network

Since then, Canaan has also had multiple rounds of financing. Until March this year, Canaan had also received hundreds of millions of dollars in financing, but the capital is unknown.

Although the capital market is quite optimistic, the road to listing has been full of twists and turns.

In June 2016, Luyitong Electric, a company listed on the Growth Enterprise Market of the Shenzhen Stock Exchange, announced that it planned to reorganize its major assets at a price of 3.06 billion yuan (including 1.061 billion yuan in cash and 1.999 billion yuan in shares). There are 14 shareholders who have acquired all the shares, with a total transaction price of 3.06 billion yuan. The transaction was later suspended by the Shenzhen Stock Exchange due to suspicion of "backdoor".

Then in August 2017, Jianan Zhizhi once again sought to be listed on the New Third Board. Unfortunately, in September of that year, relevant government departments began to ban all cryptocurrency transactions and ICOs in the country. Canaan Creative also received four consecutive inquiries from stock transfer companies in October and November of that year, all of which were asked about the policy environment impact and the company's ability to continue as a going concern. Canaan Zhizhi finally voluntarily gave up listing in March of the following year.

In May 2018, Canaan made a comeback, this time choosing the Hong Kong market. On May 15, Canaan officially submitted a prospectus application to the Hong Kong Stock Exchange, intending to list on the Hong Kong Main Board in the form of a red chip, with Morgan Stanley, Deutsche Securities, Credit Suisse and CMB International serving as joint sponsors. Six months later, the official website of the Hong Kong Stock Exchange classified Canaan Zhizhi's listing application as "invalid", and the road to listing was once again broken.

The mainland and Hong Kong exchanges say no to mining machine manufacturers, the fundamental reason is that they have doubts about the sustainability of their business.

And mining machine manufacturers are keen to go public because they are clearly aware of the instability of their current "mining job" and must prepare for the transformation early. First of all, the price of digital currency fluctuates greatly, and the business of mining machines, mining pools, and trading platforms closely related to it is like "depending on the sky." Secondly, as the only mining machine business in the digital currency ecosystem that has physical assets and "hard core" technology, it is always in the most passive part of the ecological value chain, which makes mining machine manufacturers feel insecure for a long time.

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3. Eight years of ups and downs and hardships in starting a business

Canaan Creative started out as the inventor of ASIC mining machines, and its entrepreneurial process is still quite legendary.

In June 2012, Zhang Nangeng (Pumpkin Zhang), who was in the last year of his Ph.D. study at Beihang University, resolutely chose to drop out of school to develop an ASIC mining machine before the American "Butterfly Laboratory" and devoted himself fully to the research and development of ASIC, and finally successfully launched the ASIC mining machine. The world's first ASIC mining machine.

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Avalon Miner/Graph Source Network

The computing power brought by Avalon is subversive. Its version 1.0 has adopted 110 nm technology, and its computing power can dig out 357 bitcoins a day. Based on the bitcoin price in early 2013, more than 200,000 RMB can be produced in one day. Some people paid back their capital after only a few days of mining, and then continued to mine, and some people chose to transfer the mining machine at a price several times higher. The first batch of mining machines also made these early players earn a lot of money.

2013 can be said to be a roller coaster year for Pumpkin Zhang.

In April 2013, he brought in Li Jiaxuan, who had worked as an IC engineer at Vimicro, as a partner. The two each invested 100,000 yuan to establish "Beijing Jianan Yunzhi Information Technology Co., Ltd.". The word Jianan in the company's name is taken from the names of the two co-founders. Canaan Yunzhi was officially born.

Canaan, which started with Avalon, has made a major strategic shift at this moment: announced the termination of the sales of the overall mining machine, and only focused on the development and production of chips.

At this time, Jianan, who had been developing smoothly, began to suffer repeated setbacks. Chip development and delivery have been delayed many times, and doubts in the industry have arisen one after another. In early November 2013, when the third batch of chips failed to be delivered on schedule, Canaan's reputation fell to the extreme.

The room leak happened to be raining overnight. At this time, Roasted Cat (Jiang Xinyu), who graduated from the junior class of the University of Science and Technology of China, also successfully developed an ASIC mining machine, and the computing power market was occupied by Roasted Cat’s mining machine.

Avalon's share in the mining machine market was eroded by roasted cat mining machines, and chip research and development has not made major achievements. Pumpkin Zhang and his Canaan encountered the darkest moment.

The comprehensive transformation of chips failed, and Pumpkin Zhang learned from the pain and decided to save the country with a curve and regain his specialty mining machine assembly business. On November 15, 2013, Avalon 2.0 was launched, using more advanced 55 nm technology. But at this time, the plight of Pumpkin Zhang no longer comes from competing mining machines, but from the gradually cooling market.

At the end of 2013, the central bank and other five ministries and commissions issued the "Notice on Preventing Bitcoin Risks". The price of Bitcoin fell precipitously, with a drop of nearly 50% in half a month, and the demand for mining machines dropped sharply. However, before Canaan could fully recover, Bitmain emerged suddenly, and Antminer successively launched star products to occupy the market. Bitmain came from behind and became the number one mining machine manufacturer, while Canaan had no choice but to retreat to the second place.

In recent years, Canaan is also striving to transform into the AI ​​field.

In September 2018, Canaan released the first-generation AI chip Kendryte K210, and mass production began in the fourth quarter of 2018, mainly for smart home, smart retail, security, automatic driving assistance systems, smart industry, medical care , Education, Authentication.

epilogue

With the ringing of the NASDAQ bell, Canaan Zhizhi’s listing journey will come to a successful conclusion. For Canaan Zhizhi and the entire blockchain industry, this is a memorable day. But it is only the beginning. When the listing of blockchain companies is no longer a "big news" that needs to be shouted, the industry will be considered to be truly mature.

With the success of Canaan, the other two mining machine giants, Bitmain and Ebang International, are also on the road to IPO. How to divide the future mining machine market and how to compete in technology competitions are on the track where everyone is transforming to AI. What kind of contest there will be is worth waiting for the market.