Canaan Inc., a leading crypto mining hardware manufacturer, has been issued a delisting warning by Nasdaq after its stock price has failed to meet the exchange’s minimum bid requirement of $1 per share. The company now has 180 days to raise its stock price or risk being removed from the Nasdaq.
The warning follows a significant downturn in Canaan’s stock performance, which has dropped by 63% over the past year. Nasdaq notified Canaan on Wednesday that it has not complied with listing rules, as its stock has remained below $1 for 30 consecutive business days. To regain compliance, Canaan must achieve a closing price of $1 per share for at least 10 consecutive trading days. The company has until July 13 to meet this requirement.
Canaan’s shares closed at $0.79 on Friday, reflecting a 3.8% drop on the day. This follows a long period of underperformance, with the stock failing to exceed $3 per share since December 2024. The company’s stock struggles are part of a broader trend in the crypto mining sector, where demand for mining rigs has slowed as more companies shift focus to artificial intelligence (AI) applications.
Canaan’s Options to Avoid Delisting: Reverse Stock Split and Extension
If Canaan cannot bring its share price above $1 by the July 13 deadline, it may apply to Nasdaq for an extension. One option the company could consider is a reverse stock split, a process where it reduces the number of shares in circulation, thus increasing the value of each share. While this could help raise the stock price temporarily, it is not a guaranteed long-term solution.
In its filing, Canaan stated that it may also seek an additional extension if it is unable to meet the price requirement on time. If Nasdaq determines that Canaan cannot regain compliance, the company could be delisted and moved to over-the-counter (OTC) markets, where trading volumes tend to be lower and liquidity can be more limited. This could further impact Canaan’s stock price and make it harder for investors to buy and sell shares.
The delisting risk is not unique to Canaan. In December, Kindly MD, a Bitcoin treasury company, also received a delisting notice from Nasdaq for trading below $1, while biotech company Windtree Therapeutics was removed from Nasdaq in August. Such events often lead to sharp declines in stock prices as investors look to exit their positions before delisting occurs.
