Shareholder rights law firm Robbins LLP announces that a purchaser of Canaan Inc. (NASDAQ: CAN) filed a class action complaint for alleged violations of the Securities Exchange Act of 1933 pursuant to the Company's November 2019 initial public offering ("IPO"). Canaan engages in the research, design, and sale of integrated circuit (IC) final system products for bitcoin mining and related components.
If you suffered a loss as a result of Canaan's misconduct, click here.
Canaan Inc. (CAN) Accused of Misleading Shareholders
According to public record, in November 2019, Canaan finally completed a NASDAQ IPO at $9.00 per ADS for proceeds of approximately $90 million. Prior to its IPO, in October 2019, Canaan entered into a purported "strategic cooperation" agreement with Hangzhou Grandshores Weicheng Technology Co., Ltd ("Grandshores") in which Grandshores agreed to purchase up to $150 million worth of equipment from or distribute on behalf of Canaan. The agreement turned out to be a related party transaction, which Canaan failed to disclose in its registration statement. Instead, the Company touted its sales of $132 million in 2019 and $36.2 million in cash on hand in the end of 2018. Then, on February 20, 2020, Marcus Aurelius Value published a report exposing Grandshores as an undisclosed related party transaction that boosted Canaan sales and irregularities involving reported distributors and the likelihood Canaan's largest Chinese customers would not return. On this news, Canaan ADS' fell to $5.32 per ADS, representing a 40% decline from its IPO price.
Canaan Inc. (CAN) Shareholders Have Legal Options
Robbins LLP is a nationally recognized leader in shareholder rights law. The firm represents individual and institutional investors in shareholder derivative and securities class action lawsuits, and has helped its clients realize more than $1 billion of value for themselves and the companies in which they have invested. Click here to receive free alerts from Stock Watch when companies engage in wrongdoing.
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