Canaan Is Selling Its Bitcoin to Buy Back Its Own Stock as Rig Sales Collapse 96%
Bitcoin mining-machine maker Canaan has a strange problem: its stock is so cheap that buying it back looks like the best use of its money — and the cash to do it is coming from selling the very bitcoin it used to hoard.
The Nasdaq-listed maker of Avalon mining rigs launched an initial $20 million share buyback program on November 10, under a broader $100 million authorization its board approved on November 6. Management says it will pursue repurchases more aggressively as funds become available, and it is “selectively monetizing” its cryptocurrency holdings to pay for them.
The hardware business has nearly stopped
Canaan’s third-quarter results explain the urgency. Revenue from mining machines — the company’s core business — fell 96% year over year to just $4.8 million, down from $118.6 million a year earlier. Total quarterly revenue dropped about 90% to $14.5 million, from $150.5 million.
The company blamed weaker demand and lower selling prices. Its own mining operation, which brought in $9.5 million in the quarter, now earns nearly twice as much as the hardware business that built the company. Canaan mined 133 BTC in the quarter.
The stock has been punished accordingly: shares have lost about 75% this year through Wednesday’s close, and fell roughly 19% on Tuesday after the results came out.
A profit built on paper gains
Despite the collapse in sales, Canaan reported an $8 million quarterly profit — but only because revaluing its cryptocurrency and derivatives produced gains large enough to cover a $42.9 million operating loss. The profit reflects bitcoin’s higher price at the end of September, not the health of the business.
The buyback math is also tighter than it looks. Canaan held 1,875.5 BTC as of September 30, but most of it is spoken for: 1,258 BTC were pledged against loans and 100 BTC sat in a fixed-term product, leaving 517.5 BTC — worth $43.7 million at quarter-end — held directly. Of its $72.8 million in cash and restricted cash, $50 million backs a letter of credit supporting infrastructure commitments, leaving about $22.8 million outside the restricted balance.
This is not the first time the treasury has funded buybacks. In an October update, Canaan said it had sold 3,952 ETH and 54.5 BTC for about $13.9 million, and it used $5.4 million to buy back 13.6 million American depositary shares in late August.
Management says the stock is undervalued
CEO Nangeng Zhang said Canaan is maintaining a long-term digital-asset treasury while selling holdings selectively to fund repurchases, and that management believes the stock undervalues the business and its growth prospects. The buyback authorization lasts 12 months, and the company can adjust purchases to its operating and funding needs.
Canaan guided fourth-quarter revenue to $18 million to $22 million — an improvement on the third quarter, but still a fraction of what the hardware business generated a year ago. Zhang cautioned that the guidance should not be read as a recovery in demand.
The Bit Take: Canaan is a mining-rig maker whose rigs barely sell anymore, funding a buyback with the bitcoin it once stockpiled — while most of that bitcoin is already pledged or locked up. A $20 million program sounds bold until you compare it with $22.8 million of unrestricted cash. The bet is that the stock is too cheap to ignore; the risk is that the treasury runs dry before the hardware business comes back.
Sources: CoinDesk, “Canaan may sell more bitcoin for stock buybacks as mining-rig revenue falls 96%” (2026-11-12); crypto.news, “Canaan turns to Bitcoin holdings as mining machine sales fall 96%” (2026-11-12).
