Cryptocurrency mining equipment manufacturer Canaan has announced its board of directors approved a share repurchase program of up to $10 million, or about 3.3% of its outstanding shares.
The China-based company was listed on the Nasdaq stock exchanges last year, selling shares at $9 each as part of its initial public offering, in which it raised $90 million. Since the listing, its shares have seen their price drop over time, going form little over $6 at the beginning of the year to now little over $2.
Canaan said it will buy back up to $10 million worth of its American depositary shares and or Class shares (each ADS represents 15 Class A shares) directly over a 12-month period that starts on September 22. In a press release, the firm added details on the program:
The number of [American Depositary Shares] repurchased and the timing of repurchases will depend on a number of factors, including, but not limited to, price, trading volume and general market conditions, along with Canaan’s working capital requirements and general business conditions.”
Canaan’s unaudited second-quarter financial results show the firm’s year-over-year total net revenues dropped 26.3%. Its CEO Nangeng Zhang claimed the drop was associated with the Bitcoin halving event that occurred in May of this year, and with the COVID-19 pandemic’s effects on the economy and the markets.
The firm’s CFO Quanfu Hong, however, hinted that Canaan could be already considered a share buyback program at the time, as he said the firm was “confident in the underlying strength of our fundamentals and optimistic about the long-term growth prospects of our business.”
Given the decline of its stock price, buying back shares could be sound for the firm. Hong has also said it is looking to continue to invest in areas “that can strengthen our product offerings, streamline our operations, and solidify our market leadership.”
Featured image via Pixabay.