Canaan, an application-specific integrated circuit (ASIC) manufacturer, has announced a stock repurchase program worth up to $100 million. Canaan’s chairman and CEO, Nangeng Zhang, stated in a filing with the United States Securities and Exchange Commission (SEC) that the action was motivated by “recent international frictions” and “domestic quarantine measures for Covid-19 control.”
Canaan is launching a $100 million stock buyback in response to international conflict and Covid-19 lockdowns
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. Canaan will repurchase American depositary shares that correspond to Class A shares through open market 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. China has been coping with a Covid-19 outbreak for the previous two weeks, and Hangzhou, the sub-provincial city where Canaan is located, has been on lockdown for more than a week.
“We noticed that recent international tensions, domestic quarantine measures for Covid-19 control, and macroeconomic variables in the capital market have all had a negative effect on our stock performance,” Canaan’s CEO remarked. “Given the company’s solid fundamentals and cash position, we would like to allocate further money to maximize shareholder value.”
Canaan’s shares are currently trading at $4.64 per share, down from an all-time high of $34.63 per share on March 12, 2021. Canaan’s shares have lost 86.60 percent of their USD worth in just over a year. Canaan’s shares increased in value by 2.42 percent on the news of the stock buyback.
“This further share repurchase program underscores our conviction in the company’s long-term prospects,” Nangeng Zhang stated in his announcement. “We remain committed to our diligent and agile operations, and believe that we are able to overcome the challenges and make greater achievements.”
Disclaimer: These are the writer’s opinions and should not be considered investment advice. Readers should do their own research.