Bitcoin miner Bitfarms’ stock surged Tuesday after the Canadian company announced a share buyback program.
Bitfarms—which trades on both the Toronto Stock Exchange and Nasdaq—was recently trading higher on the American index (NASDAQ: BITF) by nearly 14%, at a price of $1.28.
The Toronto-based company said that it is now authorized to purchase up to 49,943,031 of its common shares out of the 557,548,857 common shares outstanding—about $64 million worth at the current price. This represents up to 10% of Bitfarms’ public float of 499,430,313 common shares.
“We believe that Bitfarms’ shares are currently undervalued because our Bitcoin business is underappreciated by the market, with little to no value being associated with our high-performance computing potential,” said Bitfarms CEO Ben Gagnon, in a statement.
A share buyback is when a company buys its own stock, with the hope of increasing its price by taking it off the market and reducing its supply.
Bitcoin mining giant Bitfarms in March bought Stronghold Digital Mining as part of a bigger push into the artificial intelligence industry.
Bitcoin miners are homing in on AI; as both industries require huge amounts of energy and data centers, mining operations are able to use their existing infrastructure to cater to the demand for AI.
Bitcoin mining—the business of processing transactions and minting new digital coins—is a tough industry, as the price of the leading cryptocurrency is volatile. If it drops too much, then miners can struggle to cover their expenses. And mining difficulty is frequently increasing, further complicating matters for such companies.
Bitfarms is one of the biggest miners in the space, with 15 data centers scattered through Canada, the U.S., Argentina, and Paraguay.
