Shares for Bitcoin mining manufacturer Canaan surged 40% Wednesday following an announced $100 million stock buyback program. Headquartered in Beijing, China and listed on the Nasdaq stock exchange, Canaan is the creator of the less popular Avalon miner series. The machine line has struggled to gain widespread market adoption behind rivals Bitmain and MicroBT.
The new repurchase program authorizes Canaan to purchase up to $100 million worth of shares over the next 24 months in a self-described act of “confidence in the company’s long-term outlook,” Canaan CEO Nangeng Zhang in the SEC filing.
“We noticed that the recent international frictions, the domestic quarantine measures for COVID-19 control, and macro factors across the capital markets have adversely impacted our stock performance,” Zhang said. “Given the strong fundamentals and cash position, we would like to allocate additional capital to drive value for our shareholders".
Canaan previously announced a $20 million share repurchase program in September 2021. At the time, Zhang said the current valuation did "not fully reflect the company's growth potential" and therefore wanted to allocate capital for "optimizing value creation."
Following Wednesday's announcement – the largest share repurchase program in the mining industry to date – Canaan released an update on the logistical challenges impacting its mining machine factory and warehouses. Canaan suspended delivery of machines due to a resurgence of COVID-19 and lock-down measures in China. It expects both a backlog of deliveries and first-quarter 2022 revenue to take a hit.
Still, Canaan remains faithful to its vision. “We remain committed to our diligent and agile operations, and believe that we are able to overcome the challenges and make greater achievements,” Canaan’s filing concluded.
Image via Canaan.
