Bitcoin Miner Argo Blockchain Stock Plummets 40% as Firm Risks Bankruptcy October 31, 2022 October 31, 2022 Kelly Cromley http://1AZFjzw2#Nwf63pYaMWq#xIY
Bitcoin NewsOctober 31, 2022 by Kelly Cromley

Bitcoin Miner Argo Blockchain Stock Plummets 40% as Firm Risks Bankruptcy

While preparing this report, shares of London-based Bitcoin mining company Argo Blockchain Plc (LON: ARB) had fallen by as much as 37.5% to 9.75 pence, representing a very troubling period in its existence. Investors of Argo Blockchain were angered on Monday when the firm said that its hopes of receiving funding from an investor did not materialize, limiting its exposure to operational funds in the immediate term.

As said before, the Company inked a non-binding letter of intent with a strategic investor to finance roughly £24 million ($27 million) through a subscription for common shares. The firm is no more confident that this commitment will be realized on the parameters originally disclosed. Argo continues to investigate other funding alternatives, according to a statement filed to the London Stock Exchange (LSE).

The company did not disclose the precise factors why the transaction failed to get completed, but it comforted shareholders that it is investigating additional liquidity-securing options. It mentioned the disposal of its current Bitcoin mining devices as one of the choices. The business reportedly sold 3,843 Antminer S19J Pros for $5.6 million as opposed to the 3,400 it had expected to sell for $7 million. Within this is the conundrum: the values of assets in the sector it now covers are falling at an astonishing rate, while operating expenses have continued to soar.

The leading actors in the cryptocurrency mining business face a number of obstacles, including skyrocketing energy costs hurting European-based companies and inflationary rise, which is intertwined with interest rate increases that have typically hampered access to cash. As disclosed in its announcement, it is no longer surprising that Argo Blockchain is in dire straits, and failing to find funds as a matter of utmost importance might result in negative cash flow. If this occurs, the company may be compelled to declare bankruptcy.

“While Argo investigates additional funding possibilities, there is no promise that any formal agreements will be signed or that any transactions will be finalized. “In case Argo be unable to secure further funding, the firm would experience negative cash flow in the near future and be forced to reduce or terminate operations,” the company stated.

In addition to Argo Blockchain, other significant participants in the cryptocurrency mining environment, such as Core Scientific Inc (NASDAQ: CORZ), have had a difficult go of it for quite some time, with analysts being forced to lower the company’s stock in recent days after the company hinted at bankruptcy. While Core Scientific’s stock has declined by 97% so far in 2022, shares of Argo Blockchain have declined by over 92%. Like bankruptcy spreads across the cryptocurrency mining environment, as it did with loan organizations, investors may be obliged to divert their cash in response to the caution issued by the most reputable operators in the industry.

AuthorKelly Cromley

Kelly is our in house crytpto researcher, delving into the stories which matter from blockchains being used in the real world to new ico coming out.