Cango Inc. Accelerates Strategic Transformation into Global Bitcoin Mining with Divestiture of PRC Business, New Shareholders and Acquisition of Additional Mining Capacity
- Sale of PRC operations for US$351.94 million provides substantial capital for Bitcoin mining expansion
- Acquisition of 18 EH/s mining capacity increases total capacity to significant 50 EH/s
- Strong strategic backing with new shareholders EWCL and GT providing expertise and capital
- Geographic diversification across North America, Middle East, South America, and East Africa reduces regulatory risk
- Significant shareholder dilution through issuance of 146.7 million Class A ordinary shares
- Potential additional dilution from 97.8 million bonus shares based on price thresholds
- Complete business model transformation carries execution risks
- Concentration of voting power with EWCL holding 36.74% of voting rights
Insights
Cango's complete transformation from Chinese operations to global Bitcoin mining represents a high-risk, high-reward strategic pivot with significant execution challenges ahead.
Cango's announcement represents a complete strategic overhaul from a China-based business to a global Bitcoin mining operation. The company has executed three critical transactions: divesting all PRC operations for
This transformation is particularly notable for its scale and speed. The company is aiming to reach 50 EH/s of total mining capacity, which would position it among the larger Bitcoin mining operations globally. For context, the entire Bitcoin network hashrate currently stands around 450-500 EH/s, meaning Cango is targeting approximately
The governance restructuring is equally significant. EWCL will control
The company faces substantial execution risks. Mining operations require specialized expertise in site selection, energy procurement, cooling infrastructure, and operational management - capabilities Cango must rapidly develop. Additionally, the Bitcoin mining industry faces ongoing challenges including regulatory uncertainty, price volatility, and the upcoming 2024 halving event which will reduce mining rewards.
This pivot demonstrates management's belief that Bitcoin mining offers better long-term prospects than their previous China-based operations, but represents a high-risk, high-reward strategy requiring substantial operational transformation.
The financial implications of Cango's transformation deserve careful scrutiny. The
The shareholder restructuring creates a complex ownership hierarchy. EWCL's acquisition of high-vote shares grants it
The potential issuance of 97.8 million additional bonus shares based on price thresholds introduces further uncertainty regarding the company's future capital structure. The transaction includes a six-month lock-up period for newly issued shares, which temporarily prevents immediate selling pressure but creates a potential overhang once the restriction expires.
From a valuation perspective, this transformation makes historical comparisons largely irrelevant. Investors must now evaluate Cango based on mining economics: Bitcoin price projections, network difficulty trends, energy costs, and operational efficiency. The company's mining capacity target of 50 EH/s would require substantial ongoing capital investment for equipment, facilities, and infrastructure.
This strategic pivot represents a high-stakes bet on Bitcoin's long-term prospects, with significantly different risk-reward dynamics compared to Cango's previous business model.
Key Transformation Initiatives and Timeline:
- May 27, 2025: Cango divested all PRC-based operations and announced changes to the board and management, including the appointment of co-founder and CEO Mr. Jiayuan Lin as interim CFO.
- June 2, 2025: Cango announced a definitive agreement under which the Company's co-founders and their affiliates will sell 10 million Class B ordinary shares to Enduring Wealth Capital Limited ("EWCL") for a total purchase price of
US ($70 million US of which is subject to certain conditions).$15 million - June 4, 2025: Cango entered into the third amendment to acquire an additional 18 EH/s in crypto mining capacity through the issuance of Class A ordinary shares of the Company to a group of Sellers, led by Golden TechGen Limited ("GT") (the "Share-Settled Transactions").
Xiaojun Zhang, co-founder and executive chairman of Cango, commented, "Exiting our legacy PRC business marks a defining moment in Cango's journey. By comprehensively repositioning ourselves as a focused global Bitcoin mining company, we've unlocked the flexibility, capital, and clarity of purpose needed to lead in the next era of digital finance. With a refreshed shareholder structure and expert governance, we are ready to capture the enormous opportunities emerging across global crypto markets."
Divestiture of PRC Business and Governance Changes
On May 27, 2025, Cango completed the sale of all of its PRC-based operations to Ursalpha Digital Limited for a total cash consideration of approximately
In connection聽with the transaction, Cango announced a series of changes to its board and executive leadership, including the resignation of CFO Mr. Yongyi Zhang and the addition of two new independent directors with extensive experience in FinTech, Web 3.0, AI, and global capital markets. Mr. Jiayuan Lin, the Company's co-founder and CEO, was appointed interim CFO.
New Shareholder and Governance Structure
On June 2, 2025, Cango announced a definitive agreement under which the Company's co-founders and their affiliates will sell 10 million Class B ordinary shares to Enduring Wealth Capital Limited ("EWCL") for a total purchase price of
Following the consummation of the Share-Settled Transactions detailed below, EWCL is expected to hold approximately
Finalized Share-Settled Acquisition Agreement
On June 4, 2025, Cango entered the third amendment to acquire 18 EH/s in crypto mining capacity, through the issuance of Class A ordinary shares of the Company to the Sellers, led by Golden TechGen Limited ("GT") (the "Share-Settled Transactions"). Upon closing, this acquisition will bring the Company's total mining capacity to 50 EH/s. The Company will issue 146.7 million Class A ordinary shares, equivalent to 73 million ADS, at closing, subject to a six-month lock-up period to avoid any immediate market impact.
An additional 97.8 million bonus shares may be issued if certain post-closing price thresholds are met. Furthermore, a final
Post-closing, the Sellers will collectively own approximately
Jiayuan Lin, Co-founder, CEO and interim CFO of Cango, stated, "These strategic transactions and our new shareholders empower us to pursue unmatched scale and efficiency in Bitcoin mining. Our expansion plans are already underway across key regions, and we remain committed to driving innovation and creating value for all of our stakeholders. With the PRC divestiture completed, seasoned leadership in place, and a strong foundation for growth in digital asset infrastructure, Cango is poised to become a leading force in global Bitcoin mining."
About Cango Inc.
Cango Inc. (NYSE: CANG) is primarily engaged in the Bitcoin mining business, with operations strategically deployed across
Media Contact
Juliet Ye
Cango Inc.
Tel: +86 21 3183 5088 ext.5581
Email: [email protected]
View original content to download multimedia:
SOURCE Cango Inc.
FAQ
What is the total value of Cango's PRC business divestiture?
How much Bitcoin mining capacity will CANG have after the new acquisition?
What percentage of Cango will EWCL own after the transactions?
How many shares is Cango issuing for the mining capacity acquisition?
Who will be the largest shareholder of CANG after the transactions?
