ASIC Mining Rig Manufacturer Canaan Reveals $100 Million Stock Buyback Program
The application-specific integrated circuit (ASIC) manufacturer Canaan has revealed the firm is offering a stock buyback for up to $100 million. Canaan’s chairman and CEO Nangeng Zhang highlighted in a U.S. Securities and Exchange Commission (SEC) filing that the move was due to issues with “recent international frictions” and “domestic quarantine measures for Covid-19 control.”
International Conflict and Covid-19 Lockdowns Push Canaan to Launch a $100 Million Stock Buyback
On March 16, the bitcoin mining rig manufacturer Canaan published a filing with the SEC that explains the firm is initiating a stock buyback worth $100 million. Under the repurchase program, Canaan will purchase American depositary shares that reflect Class A shares via open market transactions and privately negotiated transactions.
Canaan’s CEO Nangeng Zhang revealed why the company chose to proceed with a stock buyback, highlighting international conflict and the current Covid-19 quarantines taking place in China. During the last two weeks, China has been dealing with a Covid-19 outbreak, and Hangzhou, the sub-provincial city where Canaan is headquartered, has been on lockdown for over a week.
“We noticed that the recent international frictions, the domestic quarantine measures for Covid-19 control, and macro factors across the capital market have adversely impacted our stock performance,” Canaan’s CEO said. “Given the strong fundamentals and cash position of the company, we would like to allocate additional capital to drive value for our shareholders.”
At the time of writing, Canaan’s shares are swapping for $4.64 per share after touching an all-time high value on March 12, 2021, at $34.63 per share. Percentage-wise, Canaan’s shares saw a large 86.60% drop in USD value in just over a year. Following Canaan’s stock buyback announcement, Canaan’s shares jumped 2.42% higher in value.
“This new share repurchase program demonstrates our confidence in the company’s long-term outlook,” Nangeng Zhang’s announcement concluded. “We remain committed to our diligent and agile operations, and believe that we are able to overcome the challenges and make greater achievements.”
What do you think about Canaan initiating a stock buyback program for $100 million? Let us know what you think about this subject in the comments section below.