Canaan, a manufacturer of application-specific integrated circuits (ASIC), has announced that it is offering stock buybacks up to $100,000,000. 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.”
Canaan launches a $100 million stock buyback due to international conflict and Covid-19 lockdowns
Canaan is a manufacturer of bitcoin mining rigs and published a file with the SEC on March 16. It explains that it will be initiating a buyback in stock worth $100,000,000. Canaan will purchase American Depositary Shares that are Class A through both open market transactions as well as 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. China’s Covid-19 epidemic has intensified over the past two weeks. Hangzhou, Canaan’s sub-provincial capital, was placed under lockdown more than a week ago.
“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.”
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