Canaan's SEC filing allows crypto-funded buybacks of up to $30M, or 20% of market cap. The move could support the stock. It depletes a reserve the loss-making hardware maker relies on.
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Canaan, the Bitcoin mining hardware maker, received SEC approval to use proceeds from its digital asset holdings for share buybacks. The Aug. 4 filing expands the company's existing $30 million repurchase program to include crypto sales. The move gives management a tool to narrow the gap between Canaan's market valuation and its treasury holdings. It also reduces the cushion available to a business that burned through $88.7 million in net losses during the first quarter.
The buyback program started Dec. 12, 2025, with a 12-month ceiling for ADS or Class A ordinary share repurchases. By May 19, Canaan had spent about $2 million to buy back 2.8 million ADSs, according to its first-quarter results. The unused authorization stood at roughly $28 million as of that date. The Aug. 4 filing did not update the total spent.
Canaan's market capitalization was $144.7 million as of 2:55 p.m. EDT on Aug. 4, based on StockAnalysis data sourced to S&P Global Market Intelligence. The company's digital asset treasury, estimated at roughly $130 million using Aug. 3 prices, together with its March 31 cash balance of $43.5 million, gives a gross sum of $173.5 million. That total sits about $28.8 million, or 19.9%, above the intraday market cap. The calculation uses different dates and omits liabilities and asset restrictions. It captures the scale of the discount.
Canaan's June operating update listed 1,915 BTC and 3,952 ETH on its balance sheet as of June 30, including receivables and excluding customer deposits. The latest announcement leaves the asset and amount unspecified. Cash stood at $43.5 million against $106.4 million in current liabilities at March 31, down from $80.8 million at year-end. The company had pledged 905 BTC for secured term loans and placed another 100 BTC in a fixed-term product. Those March figures predate the June holdings, so current restrictions remain uncertain. April brought about $42 million of customer-receivable collections, according to Canaan's first-quarter report.
The company recorded a $22.9 million gross loss and a $54.3 million operating loss in the first quarter, with net loss reaching $88.7 million. Second-quarter revenue came in at $35 million to $45 million, in line with guidance. The weaker hardware cycle has made the expanding treasury more central to Canaan's valuation, the company's coverage noted.
A well-timed buyback could improve per-share value. Each dollar directed to repurchases shrinks the reserve available for operations. Canaan's working-capital needs and board oversight set the limit on how much of the program gets used, the company said. The stock's discount to treasury value could narrow if buybacks are executed. Operating losses could continue to pressure the balance sheet.
Canaan's Bitcoin and Ethereum holdings are subject to price volatility. The pledged BTC reduces the liquid portion of the treasury. The buyback program gives management a tool to support the stock price. It comes at the cost of reducing the cushion that has supported the company through its current losses.
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