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Canaan may sell more bitcoin for stock buybacks as mining-rig revenue falls 96%
Btc mining-machine maker Canaan is drawing on its cryptocurrency holdings to buy back its own shares as revenue from selling mining equipment collapses
The company launched a 20 million buyback program on Tuesday under a broader 100 million authorization approved by its board on Nov. 6. Management says it intends to pursue repurchases more actively as funds become available
Canaan’s shares have lost about 75% this year through Wednesday’s close, data shows
Its hardware business generated just 4.8 million in third-quarter revenue, down 96% from 118.6 million a year earlier. Canaan blamed weaker demand and lower selling prices. Its own mining operation brought in 9.5 million, nearly double its hardware revenue.
CEO Nangeng Zhang said Canaan was maintaining a long-term digital-asset treasury while “selectively monetizing cryptocurrency holdings to fund share repurchases.”
Earlier disclosures show how that works.
In an Oct update, Canaan said it had sold 3,952 ETH and 54.5 btc for about 13.9 million. It used 5.4 million to buy back 13.6 million American depositary shares, the securities representing its shares on Nasdaq, in late Aug.
The new program comes with much of its remaining treasury tied up
Canaan held 1,875.5 btc as of Sept. 30, including 1,258 pledged against loans and 100 placed in a fixed-term product. The remaining 517.5 $BTC was recorded directly as cryptocurrency assets, worth $43.7 million at quarter-end.
Of its $72.8 million in cash and restricted cash, $50 million backed a letter of credit supporting infrastructure commitments. That left about $22.8 million outside the restricted balance.
The company reported an $8 million quarterly profit despite a $42.9 million operating loss. Gains from revaluing cryptocurrency and financial derivatives helped produce the profit, reflecting bitcoin’s higher quarter-end price.
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Canaan may sell more bitcoin for stock buybacks as mining-rig revenue falls 96%
Btc mining-machine maker Canaan is drawing on its cryptocurrency holdings to buy back its own shares as revenue from selling mining equipment collapses
The company launched a 20 million buyback program on Tuesday under a broader 100 million authorization approved by its board on Nov. 6. Management says it intends to pursue repurchases more actively as funds become available
Canaan’s shares have lost about 75% this year through Wednesday’s close, data shows
Its hardware business generated just 4.8 million in third-quarter revenue, down 96% from 118.6 million a year earlier. Canaan blamed weaker demand and lower selling prices. Its own mining operation brought in 9.5 million, nearly double its hardware revenue.
CEO Nangeng Zhang said Canaan was maintaining a long-term digital-asset treasury while “selectively monetizing cryptocurrency holdings to fund share repurchases.”
Earlier disclosures show how that works.
In an Oct update, Canaan said it had sold 3,952 ETH and 54.5 btc for about 13.9 million. It used 5.4 million to buy back 13.6 million American depositary shares, the securities representing its shares on Nasdaq, in late Aug.
The new program comes with much of its remaining treasury tied up
Canaan held 1,875.5 btc as of Sept. 30, including 1,258 pledged against loans and 100 placed in a fixed-term product. The remaining 517.5 $BTC was recorded directly as cryptocurrency assets, worth $43.7 million at quarter-end.
Of its $72.8 million in cash and restricted cash, $50 million backed a letter of credit supporting infrastructure commitments. That left about $22.8 million outside the restricted balance.
The company reported an $8 million quarterly profit despite a $42.9 million operating loss. Gains from revaluing cryptocurrency and financial derivatives helped produce the profit, reflecting bitcoin’s higher quarter-end price.
#Write2Earn #BTC $BTC
