Stock of Bitfarms surges 26% following buyback announcement: Will further gains occur?
In a significant move, cryptocurrency mining company Bitfarms has announced a corporate share buyback program, authorizing the repurchase of up to approximately 49.94 million common shares over a one-year period from July 28, 2025, to July 27, 2026. This represents about 10% of its public float (499.4 million common shares).
The buybacks can be executed on the Toronto Stock Exchange (TSX), the Nasdaq, or through any other legally allowed method. The program allows repurchasing shares at market price or other exchange-approved prices. On the TSX, daily buyback limits are roughly 494,918 shares unless block purchase exceptions apply. On Nasdaq, total buybacks during the program cannot exceed 5% of total shares as of program start.
All repurchased shares will be cancelled, effectively reducing the total shares outstanding. Bitfarms has also established an automatic repurchase arrangement with its broker to facilitate buying during blackout periods.
The company’s CEO, Ben Gagnon, stated that the shares are currently undervalued, noting a market underappreciation for Bitfarms’ Bitcoin mining and high-performance computing (HPC) potential. This move is seen as a strong statement of confidence amid a transition phase, aiming to address undervaluation, reduce equity dilution, and support the stock's market performance for the next year.
The buyback program signals management confidence in Bitfarms' core businesses and future growth, especially in HPC data centers. It may help support the stock price by reducing share supply, which often leads to price appreciation. The stock reacted positively to the buyback announcement, jumping roughly 15-18% in the immediate aftermath, reflecting investor approval and buyback-driven demand.
This comes amid challenges in the cryptocurrency mining sector post-April 2024 Bitcoin halving, with Bitfarms pivoting toward HPC and AI-driven growth. Bitfarms currently operates 15 Bitcoin mining centers across North and South America, with locations in the U.S., Canada, Argentina, and Paraguay.
The Miner Supply ratio on CryptoQuant has risen to 0.09093, marking a notable increase, suggesting that miners, including Bitfarms, are adding to their reserves. As of press time, Bitfarms remains the sixth-largest miner by market capitalization, at $630 million. The stock's rally could be due to the announcement of the share buyback program and potential renewed interest in the Bitcoin market. This condition could be particularly beneficial for Bitfarms' undervalued Bitcoin holdings, currently valued at $22 million.
In summary, Bitfarms’ buyback program is a strategic move to boost shareholder value during a period of transformation. It aims to address undervaluation, reduce equity dilution, and support the stock's market performance for the next year while signaling management's belief in the company's evolving HPC strategy.
- Bitfarms' CEO, Ben Gagnon, believes the company's shares are currently undervalued, attributing this to a market underappreciation of Bitfarms' potential in Bitcoin mining and high-performance computing (HPC).
- The buyback program initiated by Bitfarms allows for the repurchasing of shares on the Toronto Stock Exchange (TSX), the Nasdaq, or through other legally accepted methods, with daily buyback limits of approximately 494,918 shares on the TSX (unless block purchase exceptions apply).
- The move to repurchase shares is seen as a strong statement of confidence in Bitfarms' core businesses and future growth, particularly in HPC data centers, and it may help support the stock price by reducing share supply, potentially leading to price appreciation.
- The share buyback announcement has resulted in a positive stock reaction, with Bitfarms' stock jumping roughly 15-18% immediately following the news, reflecting investor approval and buyback-driven demand.
