We are investigating Canaan Inc. (CAN) (“Canaan” or the “Company”) for potential violations of the federal securities laws.
In November 2019, Canaan completed its initial public offering (“IPO”), selling 10 million American Depositary Shares (“ADSs”) priced at $9.00 per share. Then, on February 20, 2020, an investment analyst publishing under the pseudonym Marcus Aurelius published a short report entitled “Canaan Fodder.” The report alleged, among other things, that Canaan was engaged in several undisclosed related-party transactions that lacked economic substance, including the sale of $150 million worth of equipment to a small Hong Kong company with an undisclosed relationship with a significant Canaan shareholder. On this news, Canaan’s ADS price fell $0.39 per share, or 6.83%, to close at $5.32 per share on February 20, 2020. Since the IPO, Canaan’s ADSs have traded as low as $4.40 per share, representing a decline of more than 51% from the offering price.