Bitcoin Miner Argo Blockchain Shares Plunge 40% As $27 Million Raise

Shares in crypto miner Argo Blockchain have fallen after the company revealed that a planned £24 million ($27 million) fundraising will no longer go ahead.

The business, which is listed on both the London Stock Exchange and Nasdaq, said in a statement to the shareholders that plans to raise more money by selling shares will no longer be completed under the previously announced terms.

The company’s share price fell 40% in early trading on the London market following the news, while New York shares fell 37.5% in pre-market trading.

“While Argo is exploring other financing opportunities, there can be no assurance that any definitive agreements will be signed or that any transactions will be completed,” the statement said.

“Should Argo not be successful in completing additional financing, Argo will become cash flow negative in the short term and have to curtail or cease operations.”

The plan to raise $27 million was announced in early September as part of a series of measures to strengthen the group’s balance sheet. At the time, the company said it had entered into a non-binding agreement with an unnamed investor, which had promised to buy up 87 million shares at £0.276 ($0.32) apiece.

Argo representatives declined to share any further details about why the investor’s purchase would no longer go through when contacted by Decrypt.

With that deal no longer going ahead, Argo said it is looking at alternatives in addition to taking other steps to preserve cash, such as selling its mining equipment. It just sold 3,843 new Bitmain S19J Pro machines in the box for $5.6 million.

Like many other miners, Argo also has been dumping Bitcoin reserves in an attempt to strengthen the balance.

The business, founded in 2017, calls itself the first climate-positive crypto miner. The facilities aim primarily to obtain energy from water, wind and solar power.

But this has not protected it from the pressure of rising energy costs. Earlier this month, the group said in a operational update that they have limited operations at the Helios plant in Texas during periods of high electricity prices.

Bitcoin miners face an existential threat

Argo’s woes are just the latest in a series of distress signals from crypto miners struggling to keep up with rising costs and difficulties.

Last week, one of the industry’s biggest players, Core Scientific, warned that it may run out of money by the end of the year and could resort to bankruptcy proceedings.

Compute North has already taken that step, petition for Chapter 11 bankruptcy in September.

With mining difficulties reach new heights while the value of Bitcoin remains stagnant, only those with the most up-to-date equipment have a chance to make money.