Why Canaan Stock Popped Today
Key Points
It was a fine day for cryptocurrencies in general, and the company benefited from the positive sentiment.
It makes a buck by both mining cryptos and selling the gear used in that activity.
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A healthy, broad-based rise in cryptocurrency prices and an update on financing were the engines driving Canaan (NASDAQ: CAN) on Wednesday. With the two bullish developments at its back, the price of the company's American depositary shares (ADSes) closed the day more than 16% higher, well above the 0.4% gain of the S&P 500 (SNPINDEX: ^GSPC).
Coins and tokens had their day
All manner of cryptocurrencies collectively staged a rally that day with, as ever, Bitcoin leading the charge. As of early evening, the bellwether digital coin was up by more than 2%. Other cryptos were vaulting higher.
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Image source: Getty Images.
What's good for the cryptoverse generally is usually good for Canaan, as it benefits both of its core activities -- crypto mining and equipment manufacturing for miners.
What's also beneficial for the company, like any other kind of enterprise, is capital. Happily for Canaan and the shareholders invested in it, there was some positive news to report on that front.
72 million reasons to be bullish
After market close Tuesday, Canaan disclosed that it has raised $72 million in fresh financing. The company said that three institutional investors -- asset management company Brevan Howard, crypto-focused financial services specialist Galaxy Digital, and Weiss Asset Management -- combined to make a strategic investment at that amount into its ADSes.
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Eric Volkman has positions in Bitcoin. The Motley Fool has positions in and recommends Bitcoin. The Motley Fool has a disclosure policy.
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