Miner Hardware Maker Canaan Announced $10 Million worth Share Buyback

Cryptocurrency mining maker company Canaan Creative recently announced a share buyback worth $10 million. The NASDAQ-listed company’s shares were trading at a 78.6% discount from its IPO price.

Share buyback program

The company announced that it will be repurchasing ordinary shares worth up to $10 million over the course of the next 12 months. The company’s filing with the SEC states,

“Under the share repurchase program, the Company may repurchase its ADSs from time to time through open market transactions at prevailing market prices, privately negotiated transactions, block trades, or any combination thereof.”

The company noted that it will also affect the repurchase transactions while complying with Rule 10b5-1 and/or Rule 10b-18 of the Securities Exchange Act of 1934. The buyback program will begin on September 22.

How many shares will be bought?

The company aims to buy back shares worth $10 million but hasn’t specified the number of shares yet. It suggested that the number and timing of repurchase will be based on numerous factors like market conditions and prices.

Canaan is one of the top mining hardware manufacturing companies in the world. It makes ASIC Bitcoin miners under the Avalon brand name. The company is based in China and tried to launch an IPO a couple of times in Asia before eventually settling on NASDAQ. Its shares were listed in the US market las November but the IPO fell flat on its face. The company raised only $90 million as the open market priced the shares at the bottom range of the offering.

The publicly listed shares are performing poorly in the market with prices at a whopping 78.6% discount from the IPO price, On Monday, Canaan shares closed at $1.92 and its market capitalization was $300.82 million.

The company’s recent performance has been less than pleasing. According to its most recent financial disclosure, Canaan revealed that its revenue has decreased by 26.3% on a yearly basis in Q2 2020. However, its quarter-on-quarter business rose by 160.9%.