Canaan Inc. (NASDAQ: CAN) has authorized its management team to monetize a portion of its digital asset treasury to fund the repurchase of its American depositary shares (ADSs). Announced on August 4, 2026, from Singapore, this strategic move operates under the existing share repurchase program approved by the Board of Directors on December 12, 2025. The decision aims to capitalize on the company’s current valuation dynamics while maintaining a disciplined capital allocation strategy that balances active treasury management with long-term commitments to holding strategic digital assets.

The authorization allows Canaan to execute repurchases based on prevailing market conditions, including the trading price of its ADSs, working capital requirements, and other relevant factors. Any further repurchases funded by digital asset proceeds remain subject to Board oversight and the limits of the existing authorization. This approach reflects the company’s intent to optimize shareholder value by leveraging its treasury holdings when market conditions present favorable opportunities.

Valuation Context

Canaan’s decision to monetize digital assets is driven by its current market positioning relative to its balance sheet strength. As of March 31, 2026, the end of its most recently reported quarter, the company’s market capitalization was trading below the combined value of its digital asset holdings and its cash and cash equivalents. This discrepancy suggests that the market may be undervaluing the company’s tangible and digital resources compared to its equity price.

Nangeng Zhang, chairman and chief executive officer of Canaan, stated that the company’s operations continue to generate bitcoin, providing a flexible source of capital. He noted that at current trading levels, Canaan’s market value does not fully reflect the value of its digital asset holdings, cash position, and underlying business strength.

Treasury Holdings Overview

The company maintains a significant position in digital assets, managed in accordance with its established treasury and custody policy. According to its June 2026 monthly production and mining operation updates, Canaan held digital assets with an approximate market value of US$130 million based on prevailing market prices as of August 3, 2026. These holdings serve as a key component of the company’s financial strategy, providing liquidity options for corporate actions such as share buybacks.

Strategic Implications

The ability to fund buybacks through digital asset monetization offers Canaan flexibility in capital allocation without necessarily impacting its cash reserves for operational needs. By tapping into its digital treasury, the company can return value to shareholders while preserving liquidity for ongoing compute and energy infrastructure operations. This strategy aligns with broader trends among companies with significant crypto-treasury positions seeking to bridge the gap between asset value and market perception.

What the Numbers Show

The core insight from this announcement is the divergence between Canaan’s market capitalization and its net asset value inclusive of digital holdings. Trading below the sum of cash and digital assets implies a potential discount on the company’s equity, which the buyback program seeks to address. By reducing the share count using assets already on the balance sheet, Canaan aims to increase earnings per share and potentially narrow this valuation gap over time, assuming stable or appreciating values for both its remaining digital assets and business operations.

Canaan Inc. has received an additional 180-day period from The Nasdaq Stock Market LLC to regain compliance with the minimum bid price requirement, extending the deadline to January 11, 2027. The company satisfies all other applicable listing requirements for the Nasdaq Capital Market, except for the minimum bid price under Listing Rule 5550(a)(2). The notification does not affect the listing or trading of the company's American Depositary Shares (ADSs), which represent 15 Class A ordinary shares and trade under the symbol "CAN".

To regain compliance, the closing bid price of Canaan's ADSs must be at least US$1.00 per share for a minimum of ten consecutive business days during the compliance period. If achieved, Nasdaq will provide written confirmation, and the matter will be closed. The company intends to monitor the bid price and evaluate all available options to rectify the deficiency before the deadline.

Timeline of Compliance Events

Canaan initially received a notification from Nasdaq on January 14, 2026, indicating non-compliance with the minimum bid price requirement. This provided an initial 180-day compliance period through July 13, 2026. In connection with the request for an additional period, the company applied to transfer its listing from the Nasdaq Global Market to the Nasdaq Capital Market. The transfer was approved on June 29, 2026, and became effective on July 1, 2026.

Listing Status

Canaan's ADSs will continue to be listed and traded on the Nasdaq Capital Market throughout the second compliance period. The company remains focused on meeting the minimum bid price requirement to maintain its listing status.