Cango shares fell by more than 21% on Tuesday after the bitcoin mining company reported an $81.6m (£60.6m) net loss for the second quarter, as it continued to reduce and restructure its mining operations.
The NYSE-listed company recorded total revenue of $50.8m for the three months, about 50% lower than in the first quarter. Bitcoin mining accounted for $47.4m of that amount.
Cango said the decline was largely linked to its decision to “right-size its mining operations”. The process has involved phasing out older S19 mining rigs and moving some of its capacity to a hosted leasing model.
The company’s operating hashrate was 27.58 EH/s on 30 June. Of that figure, 19.94 EH/s came from Cango’s own mining operations, while 7.74 EH/s represented leased capacity.
Cango mined 656 bitcoin during the quarter and said it currently holds 1,065 BTC, worth approximately $82.8m.
Despite the fall in revenue, Cango said a smaller and more efficient fleet had helped lower its average cash cost for mining each bitcoin by about 5% compared with the first quarter. The cost was approximately $73,313 per bitcoin.
The company has also begun hedging its bitcoin exposure, a move intended to provide some protection against fluctuations in the cryptocurrency’s price.
Cango has increasingly placed emphasis on profitability rather than the overall scale of its mining operations. It is also seeking to diversify into artificial intelligence infrastructure.
Chief executive Paul Yu said the company was concentrating on “unit economics rather than scale” in its legacy bitcoin mining business.
As part of its expansion into AI, Cango is converting its mining facility in Georgia to support GPU computing. The site will be able to support up to 3 MW, with revenue from the new operation expected to begin in the third quarter.
Cango shares, traded under the ticker CANG, were changing hands at about $1.89 on Tuesday morning, down roughly 21% during the day.
The company’s latest results come as bitcoin miners face pressure to control costs and improve profitability, while also looking for alternative uses for energy-intensive computing infrastructure. Cango’s decision to phase out older equipment and lease part of its capacity reflects its effort to reduce operating costs while developing a new source of income through AI-related computing.
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