The money comes after a $305 million sale of Bitcoin and gives a major investor almost 50% of the voting power. This acquisition is happening as the company restructures its balance sheet in a volatile market.
Cango, a bitcoin miner, said that it had closed a previously announced $10.5 million equity investment from Enduring Wealth Capital Limited. It also said that it had made deals for an additional $65 million in equity financing from companies owned by Cango chairman Xin Jin and Chang-Wei Chiu, a director of the company.
Cango announced on Thursday that it made the $10.5 million investment by selling seven million Class B shares at a price of $1.50 each. The shares each have 20 votes, which gives Enduring Wealth Capital 49.7% of the votes, up from 36.7%. However, it still owns less than 5% of the outstanding shares.
To get the extra $65 million, they would sell around 49 million Class A shares at $1.32 each. Each share gives you one vote. Jin and Chiu own the companies that are making the investments, and the deals are still subject to normal closing requirements, such as getting approval from the New York Stock Exchange. The business expressed its expectation that the deals will conclude this month.
Chiu would own roughly 12% of the outstanding shares and have about 6.7% of the voting power if the deal went through. Jin would own about 4.7% of the shares and have 2.6% of the voting power.
Bitcoin sale and balance sheet restructuring
The money came when Cango sold 4,451 Bitcoin (BTC$65,491) on February 9 for around $305 million. The money was used to pay off part of a Bitcoin-backed loan and lower the company’s debt.
The business said that the sale is part of a larger move toward AI and high-performance computing. It wants to use its global, grid-connected mining infrastructure to supply distributed compute capacity for the AI industry.
Yahoo Finance says that Cango’s stock price was down roughly 7.7% at the time of writing. The CoinShares Bitcoin Mining ETF, which tracks the sector, was down 3.8%.
Sector-wide volatility and earnings pressure
Cango’s capital offering comes after publicly traded Bitcoin miners lost a lot of value last week. During regular trading on February 5, CleanSpark declined around 19% and then another 8.6% after hours because it missed quarterly estimates. IREN lost about 11.5% and then another 18.5% after hours because it reported revenue below expectations and a quarterly net loss.
RIOT Platforms and MARA Holdings also fell by roughly 15% and 19%, respectively.
CoinGecko data shows that the price of Bitcoin fell sharply on the same day as mining stocks fell sharply. It went from roughly $71,426 to $62,822, a drop of about 12%.
There were also big Bitcoin transfers during this time. According to CryptoQuant statistics, miner-linked wallets sent out 28,605 BTC, or nearly $1.8 billion, on February 5. This was one of the biggest single-day withdrawals since November 2024. The next day, another 20,169 BTC moved.
Even if a lot of Bitcoin miners lost a lot of money last week, many equities are still up for the year. IREN, the biggest Bitcoin miner by market valuation, is up nearly 10% this year.
Applied Digital and TeraWulf have done the best, with each gaining over 45% this year. Core Scientific has gained about 25%, and Riot Platforms has gained approximately 17%. Over the same time, Hut 8 has gone up by almost 15%.
MARA Holdings and CleanSpark are the only two of the top 10 Bitcoin mining stocks by market cap that have lost value this year. Data from BitcoinMiningStock.io shows that MARA is down roughly 17% this year while CleanSpark is down about 6.5%.