Canaan is selling cryptocurrency holdings to fund a new $20 million share buyback after third-quarter hardware revenue fell 96% and shares dropped 75% this year.
Third-quarter mining-equipment revenue fell 96% to $4.8 million and the company posted a $42.9 million operating loss, but an $8 million profit on crypto revaluation gains and a new $20 million buyback under a $100 million authorization partially offset the negative print. With the stock already down about 75% this year, the good and bad facts largely cancel out.
Canaan has initiated a $20 million share repurchase program as its mining-equipment revenue collapsed 96% to $4.8 million in the third quarter. Despite an $8 million profit driven by crypto revaluation gains, the company faces a $42.9 million operating loss and limited liquidity, with most of its bitcoin holdings pledged against loans or restricted.
By selectively selling cryptocurrency holdings — it previously sold 3,952 ETH and 54.5 BTC for about $13.9 million and used $5.4 million to repurchase 13.6 million ADSs in late August — though most of its remaining bitcoin is pledged or otherwise committed.
It reported an $8 million profit, but only because of gains from revaluing cryptocurrency and financial derivatives; the core business had a $42.9 million operating loss.