Canaan faces Nasdaq delisting risk after shares fall below $1 threshold

Crypto mining hardware maker Canaan Inc. has received a warning from Nasdaq after its share price fell below the exchange’s minimum requirement, putting the company at risk of delisting unless it can regain its stock price within the next six months.

The Nasdaq contacted Canaan on Wednesday to notify the company that it was no longer meeting listing standards, as its shares had closed below $1 for 30 consecutive business days.

Canaan disclosed the notice in a statement on Friday, noting that it now has 180 days — until July 13 — to bring its closing bid price back above the threshold.

To regain compliance, the company’s shares must close at or above $1 for at least 10 consecutive trading days.

Canaan’s stock last closed above $1 on Nov. 28.

On Friday, shares ended trading at $0.79, down 3.8% on the day and roughly 63% lower over the past 12 months.

Nasdaq warning highlights prolonged share price slump

The warning comes amid sustained pressure on Canaan’s stock, which has not traded above $3 since December 2024.

The company, which manufactures specialized hardware used for Bitcoin mining, has faced a challenging environment as parts of the crypto mining industry adjust to changing market dynamics.

Canaan said the Nasdaq warned it was not in compliance with listing rules because its shares’ closing bid price had remained below $1 for an extended period.

Under Nasdaq rules, failure to meet the minimum bid price requirement can lead to delisting if corrective action is not taken within the allotted timeframe.

If the company fails to regain compliance by July 13, Nasdaq staff could determine that Canaan is subject to delisting, which would typically result in the stock moving to over-the-counter markets.

Such moves have historically made shares harder to trade and often led to further price declines.

Potential extension and reverse stock split option

Canaan said that if it does not meet the requirement by the July deadline, Nasdaq staff could still agree to grant it additional time to raise its share price.

The company added that it could apply for an extension that would include agreeing to “effecting a reverse stock split if necessary.”

A reverse stock split reduces the number of outstanding shares, which can mechanically lift the share price, though it does not change a company’s underlying valuation.

Such measures are commonly used by companies seeking to regain compliance with exchange listing rules.

The company has previously experienced short-term increases in its share price tied to business developments.

In October, Canaan said that a US-based company had bought 50,000 of its latest-generation “Avalon A15 Pro” mining rigs, marking its largest order in more than three years.

That announcement sent Canaan’s stock surging by 25%.

Broader trend of compliance pressure on crypto-linked firms

Canaan’s situation reflects a broader pattern among crypto-related and other small-cap companies facing listing challenges.

In December, Bitcoin treasury company Kindly MD received a similar Nasdaq notice after its shares traded below $1 for 30 consecutive days.

Nasdaq gave Kindly MD until June to regain compliance. Its shares closed at $0.46 on Friday and last traded above $1 in late October.

In another case, Nasdaq delisted biotech firm Windtree Therapeutics in August after it failed to meet compliance requirements.

Windtree had established a BNB treasury a month earlier, but its shares fell 77% on the day Nasdaq announced the delisting, as investors rushed to exit ahead of the move.

For Canaan, the next six months will be critical as it seeks to stabilize its share price and avoid removal from the Nasdaq exchange.