Canaan Inc. Class Action Lawsuit
- Company Name
- Canaan Inc.
- Stock Symbol
- Class Period
- February 10, 2021 to April 9, 2021
- Motion Deadline
- June 14, 2021
- Southern District of New York
Robbins Geller Rudman & Dowd LLP filed a class action lawsuit charging Canaan Inc. (NASDAQ:CAN) and certain of its executives with violations of the Securities Exchange Act of 1934 and seeks to represent purchasers of Canaan’s American Depositary Receipts (“ADRs”) between February 10, 2021 and April 9, 2021 (the “Class Period”). The Canaan class action lawsuit was commenced on April 15, 2021 in the Southern District of New York and is captioned Denny v. Canaan Inc., No. 21-cv-03299.
Canaan designs, manufactures, and sells bitcoin mining machines, primarily in the People’s Republic of China. On February 9, 2021, Canaan announced that its Chief Financial Officer, Quanfu Hong, had suddenly resigned effective immediately, providing no explanation as to why and citing only “personal reasons.” The next day, February 10, 2021, Canaan issued a press release announcing that its “revenue visibility ha[d] improved substantially” and making other positive statements about purported visibility into increases in the size and quality of orders Canaan had been receiving. The market reacted positively to Canaan’s statements, driving up the market price of Canaan ADRs by nearly 90%.
The Canaan class action lawsuit alleges that Canaan’s February 8th statements and other statements Canaan issued during the Class Period about Canaan’s business metrics and financial prospects were materially false and misleading. Specifically, the Canaan class action lawsuit alleges that Canaan concealed that Canaan’s fourth quarter of fiscal year 2020 (“4Q20”) sales had declined more than 93% year-over-year compared to its fourth quarter fiscal year 2019 (“4Q19”) sales and more than 93% quarter-over-quarter compared to its third quarter of fiscal year 2020 (“3Q20”) sales due to ongoing supply chain disruptions and the introduction of Canaan’s next-generation A12 series bitcoin mining machines – which had cannibalized sales of the older product offerings.
On Monday, April 12, 2021, before the opening of trading, Canaan issued a press release disclosing its actual 4Q20 and fiscal year 2020 financial results for the period ended December 31, 2020, including a 93% year-over-year decrease in computing power sold and net revenues for the quarter. On this news, the market price of Canaan ADRs collapsed from a close of $18.67 per ADR on April 9, 2021 to a close of $13.14 per ADR on April 12, 2021, a decline of nearly 30% on unusually high volume, damaging investors.
The Private Securities Litigation Reform Act of 1995 permits any investor who purchased Canaan ADRs during the Class Period to seek appointment as lead plaintiff in the Canaan class action lawsuit. A lead plaintiff is generally the movant with the greatest financial interest in the relief sought by the putative class who is also typical and adequate of the putative class. A lead plaintiff acts on behalf of all other class members in directing the Canaan class action lawsuit. The lead plaintiff can select a law firm of its choice to litigate the Canaan class action lawsuit. An investor’s ability to share in any potential future recovery of the Canaan action lawsuit is not dependent upon serving as lead plaintiff. If you wish to serve as lead plaintiff of the Canaan class action lawsuit or have questions concerning your rights regarding the Canaan class action lawsuit, please provide your information here or contact counsel, Mary K. Blasy of Robbins Geller, at 800/449-4900 or 619/231-1058 or via e-mail at firstname.lastname@example.org. Lead plaintiff motions for the Canaan class action lawsuit must be filed with the court no later than June 14, 2021.
Robbins Geller Rudman & Dowd LLP is one of the world’s leading law firms representing investors in securities class action litigation. With 200 lawyers in 9 offices, Robbins Geller has obtained many of the largest securities class action recoveries in history. For eight consecutive years, ISS Securities Class Action Services has ranked the Firm in its annual SCAS Top 50 Report as one of the top law firms in the world in both amount recovered for shareholders and total number of class action settlements. Robbins Geller attorneys have helped shape the securities laws and have recovered tens of billions of dollars on behalf of aggrieved victims. Beyond securing financial recoveries for defrauded investors, Robbins Geller also specializes in implementing corporate governance reforms, helping to improve the financial markets for investors worldwide. Robbins Geller attorneys are consistently recognized by courts, professional organizations and the media as leading lawyers in the industry.