Argo Blockchain sued for allegedly misleading investors of DailyCoin
Argo Blockchain sued for allegedly misleading investors- An investor sued Argo Blockchain for publishing inaccurate statements during its initial public offering.
- Argo allegedly failed to disclose its vulnerability to several factors.
- Argo filed IPO documents with the Securities and Exchanges Commission (SEC) in late 2021.
- Cryptocurrency mining suffered severe consequences in 2022 due to the market downturn.
On Thursday, an investor of crypto miner Argo blockchain launched a lawsuit against the firm and its executives. According to the filing, Argo allegedly published inaccurate statements during its initial public offering (IPO) in 2021 and omitted important information to mislead investors.
“The offering documents were negligently prepared and, as a result, contained false statements of material fact or omitted to state other facts necessary to make the statements not misleading,” the filing said.
The investor, identified as Aaron Murphy, and claiming to represent everyone who bought the stock from September 2021 to October 2022, accused Argo and its board members of failing to disclose their vulnerability to capital constraints, power costs and network problems.
Specifically, the plaintiff in the lawsuit alleged that investors were misled into believing that these factors had little or no impact on the company’s survival. Now Murphy said he later realized the business was “less sustainable” in contrast to the firm’s earlier statement, which overstated its financial prospects.
Throughout the filing, Murphy complained about the ongoing financial crisis with Argo, stressing that he would not have bought or bought the securities if they knew the truth.
Argo earned $105 million through the IPO
At the end of 2021, the crypto miner submitted a report to the United States Securities and Exchange Commission (SEC) regarding the IPO. Following this development, Argo decided to issue around 7.5 million shares to the public. According to reports, it offered the shares at a price of $15 and realized gains worth $105 million from the sales.
In 2022, the bear market that ravaged the cryptosphere had serious consequences for the mining sector. The period was characterized by unprecedented increases in electricity prices, falls in cryptocurrency prices and strict regulations. Due to this development, the Argo stock price fell sharply, trading at $0.3 per share in late 2022.
On the other side
- Last month, Nasdaq informed Argo that its shares had been below $1 for 30 consecutive days, thereby preventing its listing on the exchange. Amid indications of a market recovery early this month, the company’s share hit $1.96. A few days ago received it a notification from Nasdaq that it had met the required closing bid price of $1 for ten consecutive trading days.
Why you should care
Argo got a lifeline from potential bankruptcy after it signed a deal with Galaxy Digital a few weeks ago. However, in light of today’s developments, it appears that the firm has not yet overcome its tough times.
You might also like:
Troubled miner Argo Blockchain to reduce debt by $41 million by selling Helios mining facility to Galaxy Digital
Argo Blockchain asks Nasdaq to suspend trading of its shares due to restructuring
See the original on DailyCoin
