Crypto mining hardware maker Canaan Inc. has received a warning from Nasdaq that it must increase its share price within 180 days or face delisting from the major stock market index. The company's shares have seen a significant decline, down 63% in the last 12 months.
Canaan announced in a statement on Friday that Nasdaq contacted the company on Wednesday. The notification indicated that Canaan was not in compliance with listing rules because its shares' closing bid price had remained below $1 for the past 30 business days.
Nasdaq has provided Canaan with a 180-day period, extending until July 13, to "regain compliance with the minimum bid price requirement." This requirement mandates that the closing bid price must reach at least $1 per share for a minimum of 10 consecutive trading days.
Canaan's shares (CAN) last closed above the $1 threshold on November 28. This situation arises as many cryptocurrency mining companies have shifted some or all of their operations towards providing computing power for artificial intelligence, consequently reducing their demand for crypto mining rigs.
Canaan concluded Friday's trading session at $0.79, marking a 3.8% decrease for the day. The company's shares have not traded above $3 since December 2024.
Potential for Extended Compliance Period
Canaan has indicated that if it fails to boost its share price and achieve compliance by July 13, Nasdaq staff may consider granting the company additional time to rectify its share price.
The company further stated that it could formally request an extension from Nasdaq to regain compliance. This process might involve the company agreeing to "effecting a reverse stock split if necessary." A reverse stock split is a corporate action where a company reduces the number of its outstanding shares, thereby increasing the price of each remaining share.
Should Nasdaq staff determine that Canaan is unable to improve its share price, the company will be subject to delisting. Historically, delisting has led to a significant drop in share value as they become more difficult to trade, often moving to over-the-counter markets.
Canaan previously reported in October that a U.S.-based company had purchased 50,000 of its latest-generation "Avalon A15 Pro" mining rigs. This order represented Canaan's largest in over three years and caused its stock price to surge by 25%.
In December, Bitcoin treasury company Kindly MD received a similar delisting notice from Nasdaq due to its shares trading below $1 for 30 trading days. Nasdaq provided Kindly MD (NAKA) until June to increase its share price and avoid delisting. The company's shares closed at $0.46 on Friday and last traded above $1 in late October.
In August, Nasdaq delisted Windtree Therapeutics, a biotech company that had established a BNB treasury a month prior, for failing to meet compliance requirements. Shares in Windtree fell 77% on the day Nasdaq announced its decision to delist the company, as investors sought to exit their positions before the stock was removed from the exchange.