Argo Blockchain, one of many largest public Bitcoin mining corporations available on the market, is going through a money scarcity that might drive it to close down within the close to future.
In accordance with an October 31 press launch, the corporate didn’t safe a $27 million strategic funding that was supposed to enhance its liquidity place. The corporate agreed to problem 87 million shares to a sole investor, which equates to round 15% of the enterprise.
Nevertheless, Argo famous that it now not believes it is going to be capable of increase the funds “below the beforehand introduced phrases” and mentioned it was persevering with to discover different financing alternatives.
As a part of its effort to protect money, the corporate bought 3,842 new Bitmain S19J Professional Bitcoin miners for round $5.6 million. The bought machines symbolize round 384 PH/s of its complete hash fee capability, which now stands at 2.5 EH/s.
And whereas the corporate is actively in search of an answer to its money issues, it famous that there’s no assurance it is going to be capable of resolve its points. The corporate mentioned within the press launch:
“Ought to Argo be unsuccessful in finishing any additional financing, Argo would change into money stream destructive within the close to time period and would wish to curtail or stop operations.”
Earlier in October, the corporate’s CEO Peter Wall took to YouTube to clarify the steps Argo was taking to enhance its place. Wall mentioned that Argo’s profitability has been “squeezed from each side,” with excessive power costs and Bitcoin’s depreciating worth wiping out virtually all of its earnings.
The $27 million funding was supposed to supply Argo with sufficient liquidity to get by means of the subsequent 12 months. With out an equally excessive monetary injection, it’s seemingly that the corporate gained’t make it till the subsequent quarter.
Argo’s shares listed on NASDAQ misplaced virtually 89% of their worth prior to now yr, whereas its LSE inventory crumbled 95% since October 2021.
