NEW YORK--(BUSINESS WIRE)--Bragar Eagel & Squire, P.C., a nationally recognized shareholder rights law firm, announces that a class action lawsuit has been filed in the United States District Court for the District of Oregon on behalf of investors that purchased Canaan, Inc. (NASDAQ: CAN) securities pursuant or traceable to the Company’s initial public offering, which commenced on or about November 20, 2019 (the “IPO” or “Offering”). Investors have until May 4, 2020 to apply to the Court to be appointed as lead plaintiff in the lawsuit.
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Canaan, a company specializing in Blockchain servers and ASIC microprocessor solutions for use in bitcoin mining, completed its initial public offering in November of 2019. Then, on February 20, 2020, an investment analyst operating under the pseudonym Marcus Aurelius published a short report entitled “Canaan Fodder” claiming, among other things, that Canaan was engaged in several undisclosed related-party transactions that lacked economic substance.
For example, the report alleges that just one month before Canaan’s IPO, a tiny Hong Kong company named Grandshores announced that it had agreed to purchase up to $150 Million worth of the company’s equipment in 2020, even though Grandshores’ entire market cap is only $50 million and it reports having only $16 million in cash on hand. Purportedly, the Chairman of Grandshores owns 9.7% of Canaan’s outstanding shares through entities he controls -- yet this relationship is not mentioned anywhere in Canaan’s SEC filings.
The complaint, filed on March 4, 2020, alleges that the Registration Statement for the IPO contained false and/or misleading statements and/or failed to disclose that: (1) the purported “strategic cooperation” was actually a transaction with a related party; (2) the company’s financial health was worse than what was actually reported; (3) the company had recently removed numerous distributors from its website just prior to the IPO, many of which were small or suspicious businesses; and (4) several of the company’s largest Chinese clients in prior years were clients who were not in the Bitcoin mining industry and, thus, would likely not be repeat customers. When the true details entered the market, the lawsuit claims that investors suffered damages.
If you purchased Canaan securities pursuant or traceable to the IPO, have information, would like to learn more about these claims, or have any questions concerning this announcement or your rights or interests with respect to these matters, please contact Melissa Fortunato or Marion Passmore by email at investigations@bespc.com, telephone at (212) 355-4648, or by filling out this contact form. There is no cost or obligation to you.
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Bragar Eagel & Squire, P.C. is a nationally recognized law firm with offices in New York and California. The firm represents individual and institutional investors in commercial, securities, derivative, and other complex litigation in state and federal courts across the country. For more information about the firm, please visit www.bespc.com. Attorney advertising. Prior results do not guarantee similar outcomes.
