Investing.com — Shares in Argo Blockchain (LON:ARB) tanked on Monday after the London-based cryptocurrency miner said it may have to cease operations after a planned capital injection from a new strategic investor fell through.
Argo Blockchain stock fell over 52% after the company said it “no longer believes that this subscription will be consummated under the previously announced terms.”
The deal, as outlined in a letter of intent last month, would have seen the buyer take an unspecified stake in the form of new shares worth $27 million, easing an increasingly severe liquidity crunch.
The company said it’s continuing to explore other financing opportunities but warned that, if it failed to find alternative sources of cash, “Argo would become cash flow negative in the near term and would need to curtail or cease operations.”
Argo stock had exploded in 2020 as the company reinvented itself as a pure-play crypto-miner, cashing in on the pandemic boom in digital currencies. It has now completed a round trip, falling back to its early 2020 levels, as the demand for crypto has waned this year against a backdrop of rising returns on fiat currency.
In the meantime, it is selling off its hard assets at an ever-faster pace. Argo said on Monday it has sold 3,843 new-in-box Bitmain S19J Pro machines, representing ~384 PH/s of total hashrate capacity, for around $5.6 million in cash. These machines are the last batch of the original Bitmain order scheduled for installation in October 2022. As a result, Argo said its total hashrate capacity remains at 2.5 EH/s.
The development suggests an increasing degree of distress at the company: in its previous plans, it had hoped to raise $7 million through the sale of only 3,400 machines.
Crypto miners have suffered not only from a slump in demand for digital currency, but also from surging costs for the energy needed to mint it. Fellow miner Compute North folded in September owing $500 million, while Core Scientific (NASDAQ:CORZ) has also warned that it may have to consider bankruptcy.
Source: Cryptocurrency - investing.com
