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SINGAPORE - Canaan Inc. (NASDAQ: CAN), a prominent player in the cryptocurrency mining industry, has announced the commencement of a share repurchase program amid a challenging market environment that has seen its stock decline by nearly 70% year-to-date. Starting today, the company’s board has authorized the buyback of up to $30 million worth of its American depositary shares (ADSs) or Class A ordinary shares over the next six months. According to InvestingPro data, the company currently maintains a market capitalization of approximately $292 million and holds more cash than debt on its balance sheet.
The decision to repurchase shares comes as a strategic move in response to what the company perceives as a significant undervaluation of its stock in the current market. While InvestingPro analysis suggests the stock is currently undervalued based on its Fair Value model, the company faces significant challenges with weak gross profit margins and rapid cash burn. Nangeng Zhang, Canaan’s chairman and chief executive officer, stated that despite recent market volatility and new U.S. tariffs, the company is determined to pursue its strategic plan and is preparing for an anticipated recovery in the bitcoin mining sector.
Canaan, established in 2013 and known for its ASIC high-performance computing chip design and production, intends to conduct the repurchase through open market transactions, privately negotiated deals, or block trades, adhering to the Securities Exchange Act of 1934 and its own insider trading policy. The timing and volume of the repurchases will be influenced by market conditions, the company’s working capital needs, and overall business environment.
The repurchase program reflects Canaan’s confidence in its business model and long-term growth potential. The funding for the buybacks will come from the company’s existing cash reserves.
This announcement contains forward-looking statements, which are subject to various risks and uncertainties that could cause actual results to differ materially from the company’s expectations. Canaan’s future business development, demand for its bitcoin mining machines, and its relationships with production partners and customers, among other factors, may impact the company’s performance.
Canaan’s move to initiate a share repurchase program is based on a press release statement and is a common practice among public companies seeking to return value to shareholders and signal confidence in the company’s prospects.
In other recent news, Canaan Inc. reported its first quarter 2025 financial results, highlighting a record number of shipments for its A15 series bitcoin mining rigs and achieving a positive gross profit of $0.6 million. This marks a notable recovery as the company surpassed its revenue forecasts despite challenges in the cryptocurrency market. Benchmark analysts adjusted their expectations by lowering the price target for Canaan’s shares to $2.00 from $3.00 but maintained a Buy rating, indicating potential value for investors. Additionally, Canaan received a compliance notice from Nasdaq due to its shares not meeting the minimum bid price requirement of $1.00 over the past 30 days. The company has until November 10, 2025, to regain compliance by maintaining a closing bid price of at least $1.00 for 10 consecutive days. Meanwhile, Canaan continues to update the SEC on its Bitcoin mining operations, although specific production figures were not disclosed. These developments reflect Canaan’s ongoing efforts to navigate the volatile cryptocurrency market while addressing regulatory requirements.
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