Bitfarms Announces Major Stock Buyback Program Citing Undervaluation

Bitcoin mining company Bitfarms has launched a comprehensive share buyback program, authorizing the repurchase of up to 49.9 million common shares over the next 12 months. This represents approximately 10% of the company's public float, signaling strong confidence in its business outlook.

Toronto Stock Exchange Approves Buyback Initiative

The Toronto Stock Exchange has officially approved Bitfarms' buyback program, which covers repurchases on both the TSX and Nasdaq exchanges. Following the announcement on Tuesday, the company's shares on Nasdaq closed up 16.8%, reflecting positive investor sentiment.

The program includes specific purchase limitations to ensure market stability. On the TSX, daily purchases are capped at 494,918 shares, representing 25% of the average daily trading volume over the past six months. For Nasdaq transactions, total repurchases cannot exceed 5% of outstanding shares throughout the program period.

Program Timeline and Share Cancellation Strategy

The buyback period officially begins July 28, 2025, and concludes July 27, 2026. Bitfarms will purchase shares at current market prices during this timeframe. All repurchased shares will be permanently canceled, effectively reducing the total number of outstanding shares and potentially increasing the value of remaining investor holdings.

CEO Highlights Business Confidence and Strategic Direction

CEO Ben Gagnon emphasized that the buyback reflects strong confidence in Bitfarms' business model and indicates the stock is currently undervalued. He specifically highlighted the company's strategic expansion into high-performance computing and AI data centers, identifying the company's energy portfolio in Pennsylvania as a key growth driver.

Founded in 2017, Bitfarms operates 15 Bitcoin mining data centers across four countries: the United States, Canada, Argentina, and Paraguay. The company maintains dual listings under the ticker BITF on both the TSX and Nasdaq exchanges.

Strategic Pivot to AI and High-Performance Computing

The share buyback announcement coincides with Bitfarms' strategic transformation from a traditional Bitcoin mining operation to a company focused on AI applications and high-performance computing. This pivot represents a response to evolving market conditions and an effort to diversify revenue streams.

The transition has gained popularity among mining companies following the 2024 Bitcoin halving, which significantly reduced mining profitability. Companies in this sector already possess the necessary hardware, power infrastructure, and cooling systems required for HPC operations, making the transition economically viable.

Financial Performance and Market Challenges

Bitfarms' first quarter 2025 financial results revealed a $36 million net loss, substantially higher than the $6 million net loss reported in Q1 2024. The company also experienced a decline in gross profit margin, dropping to 43% from 63% year-over-year, demonstrating the impact of the Bitcoin halving on mining operations.

Despite these challenges, Bitfarms has secured significant financial backing for its expansion plans. The company obtained a $300 million credit line from Macquarie to develop HPC facilities in Pennsylvania and completed the sale of its Paraguay mining site to Hive Digital for $85 million.

Mining Production and Cost Analysis

During the first quarter of 2025, Bitfarms successfully mined 693 Bitcoin at an average direct production cost of $47,800 per BTC. This production metric provides insight into the company's operational efficiency and cost structure in the current market environment.

Future Outlook and Strategic Positioning

CEO Gagnon noted that the company executed successfully across several key areas in its strategic pivot to focus on US operations and high-performance computing. This geographic and operational shift positions Bitfarms to capitalize on growing demand for AI infrastructure while reducing exposure to international regulatory uncertainties.

The combination of the share buyback program and strategic business transformation demonstrates Bitfarms' commitment to maximizing shareholder value while adapting to evolving market conditions in the cryptocurrency and technology sectors.

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