Argo Blockchain’s Renewable bitcoins (BTC) the mining business no longer appears financially viable after a fundraising method collapsed.
The mining company signed a “non-binding” letter of intent with a strategic investor in early October to raise around $27 million. However, it was revealed on October 31 that the deal fell through.
Argo Blockchain (ARBgb) Stock Price Chart
Argo’s financial difficulties
On October 7, Argo announcement that he was pursuing several different fundraising methods to maintain a positive bank balance. These were “intended to provide additional capital to the business and to ensure that the company has the necessary working capital to execute its current strategy and meet its obligations over the next twelve months”.
CEO Peter Wall revealed that Argo was struggling with high electricity prices combined with low BTC the price. He said in a video posted to Twitter that this “results in a slight price drop for Argo.”
Three different strategies were outlined in the statement to address this issue. The letter of intent was signed to amend an equipment financing agreement, which was to release $5.7 million of restricted cash. It also revealed plans to sell 3,400 mining rigs for around $6.8 million.
Finally, the most significant contribution to fundraising came from a plan to subscribe for shares with a strategic investor. However, this $27 million deal was recently revealed to have collapsed.
Argo said it no longer believes this agreement is valid on the previously announced terms and the company is exploring other options. He also issued a grim warning and said:
“If Argo fails to secure additional financing, Argo would become cash flow negative in the near term and would have to scale down or cease operations.”
ARB share price
Despite some peaks and troughs, Argo’s price on the London Stock Exchange has struggled since 2021, according to the Capital.com trading platform.
This was fueled recently following news of Argo’s financial troubles. After hitting a slight peak at 35.5p on October 4, its stock price fell throughout the month.
The price fell to a low of 13.35p on October 18, a drop of 62%. But it recovered slightly and closed on October 28 at 4:25 p.m.
Argo is still awaiting a full investor response to news of its failed fundraising deal, as it is both listed on NASDAQ and the London Stock Exchange.
After falling to 4.13p shortly after the LSE opened today, Argo was trading around 8.5p in London at the time of writing. At the same time, in premarket New York trading, Argo was trading at $1.21, down from its closing price of $1.97 on Friday.
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