HomeBlockchainArgo Blockchain Crashes as Investor Pulls Out of Proposed Capital Injection.

Argo Blockchain Crashes as Investor Pulls Out of Proposed Capital Injection.


Shares of London-based cryptocurrency miner Argo Blockchain (LON:ARB) dropped on Monday after the company hinted it would have to stop operating after a planned financial infusion by a new strategic partner fell through.

After the business stated it “no longer expects this subscription will be realized under the previously disclosed terms,” Argo Blockchain’s shares dropped more than 52%.

The agreement, which was stated in a letter of intent last month, called for the buyer to acquire an undisclosed interest in the company in the form of new shares worth $27 million, relieving an increasingly critical liquidity crisis.

The business stated that it was still looking into alternative financing options, but it issued a cautionary statement saying that if no more funding could be found, “Argo would become cash flow negative in the short future and would have to limit or discontinue its activities.”

As the firm remade itself as a pure-play cryptocurrency miner, cashing in on the epidemic digital currency boom, Argo stock had soared in 2020. As demand for cryptocurrencies has decreased this year despite rising fiat currency rates, it has now completed a full circle and is back at its early 2020 levels.

It is also disposing off its physical assets at a rate that is accelerating. Argo reported selling 3,843 brand-new Bitmain S19J Pro machines on Monday for around $5.6 million in cash, or about 384 PH/s of total hashrate capacity. These units are the final batch of Bitmain’s first purchase, and installation is planned for October 2022. Argo said that as a result, its overall hashrate capacity remained at 2.5 PE/s.

In its prior plans, the corporation had aimed to raise $7 million by selling just 3,400 devices, thus this move points to an increasing level of anxiety inside the organization.

The decline in demand for digital currency and the growing cost of the energy required to produce it have both hurt cryptocurrency miners. Due to $500 million in debt, another miner, Compute North, filed for bankruptcy in September. Core Scientific (NASDAQ:CORZ), another miner, also issued a bankruptcy warning.

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