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The company said that two of its directors will purchase an additional $65 million worth of its stock, a week after it sold more than half of its bitcoin holdings
Key Takeaways:
- Cango announced that two of its directors have agreed buy $65 million worth of its stock to help finance its accelerating move into distributed computing
- The company has been lowering its bitcoin mining activity amid a rapid decline in prices for the cryptocurrency
Cango Inc. (NYSE:CANG) received an important vote of confidence from two key backers on Thursday with its announcement of a major new investment, a week after it sold more than half of its bitcoin holdings and accelerated its move into computing management. The $65 million new investment, alongside an additional $10.5 million infusion from its largest stakeholder, will provide valuable capital for the company as it diversifies into distributed computing for AI clients to lessen its reliance on the volatile bitcoin market.
Cango largely abandoned its original business as a Chinese car trader over a year ago, and initially moved aggressively into bitcoin mining. In a campaign to diversify its business, the company announced plans last year for another move into high-performance distributed computing. It has now begun to accelerate that move, including the establishment of a new, U.S.-based company headed by an industry veteran who is already building up a team in the state of Texas, according to an announcement last week.
Cango originally adopted a “mine and hold” strategy for its bitcoin mining business, but abruptly shifted course last week with the sale of more than half of its holdings as the cryptocurrency plunged in value. It raised about $305 million through the sale of 4,451 bitcoins over the weekend of Feb. 7-8, compared with 7,474.6 in its treasury at the end of January, saying it would use the proceeds to repay a bitcoin-collateralized loan and strengthen its balance sheet.
Now, the company is further shoring up its finances with the latest fundraising from …