SAN DIEGO–(BUSINESS WIRE)–The class: Robbins LLP informs investors that a stockholder has filed a class action lawsuit on behalf of all persons and entities that purchased or otherwise acquired Argo Blockchain (NASDAQ: ARBK ) American Depository Shares (“ADS”) pursuant to the company’s initial public offering ( “IPO”) conducted on September 23, 2021, or between September 23, 2021 and October 10, 2022. The complaint alleges violations under the Securities Act of 1933 and the Securities Exchange Act of 1934. Argo, together with its subsidiaries, purports to engage engages in the cryptocurrency mining business worldwide, including the mining of Bitcoin or Bitcoin equivalents (collectively “BTC”).
What now: Similarly situated shareholders may be eligible to participate in the class action against Argo Blockchain. Shareholders who wish to be named lead plaintiffs for the class must file their papers by March 27, 2023. A lead plaintiff is a representative party acting on behalf of other class members in the lawsuit. You do not need to participate in the case to be entitled to compensation. For more information, click here.
All representation is on a contingency fee basis. Shareholders pay no fees or expenses.
What this case is about: Argo Blockchain plc (ARBK) failed to disclose material relevant information in connection with its registration statement in support of its IPO
According to the complaint, Argo completed its initial public offering on September 23, 2021, issuing 7.5 million ADSs at the offering price of $15 per ADS for an approximate dividend of $105 million. Defendants and the offering documents in connection with the IPO failed to disclose that: (i) Argo was highly susceptible to and/or suffered from significant capital constraints, electricity and other costs, and network problems; (ii) these problems prevented, blue, Argo’s ability to mine BTC, execute its business strategy, fulfill its obligations and operate the Helios facility; and (iii) as a result, Argo’s business was less sustainable than the defendants had led investors to believe.
On June 7, 2022, Argo provided an operations update and revealed that they had mined approximately 25% less BTC in May 2022 compared to April 2022 due to, blue, increased network difficulties, higher electricity prices and curtailment of mining operations at the Helios facility. On this news, Argos’ ADS price fell $0.28 per ADS, or 4.4%, to close at $6.09 per ADS on June 7, 2022.
On October 7, 2022, Argo issued a press release “announcing[ing] several strategic actions intended to bring in additional capital to the business and ensure that the company has the working capital necessary to execute its current strategy and meet its obligations over the next twelve months.” Argo stated that in addition to measures taken to reduce costs and preserve capital, the company had signed a non-binding letter of intent with a subsidiary of New York Digital Investment Group to amend an existing equipment financing agreement, plans to sell 3,400 mining machines for cash of £6m, and intends to raise approximately £24m via a proposed underwriting with a strategic investor. On this news, Argos’ ADS price fell $0.97 per ADS, or 23.26%, to close at $3.20 per ADS on October 7, 2022.
Then, on October 11, 2022, Argo gave an operational update, announcing that “[d]in the month of September Argo extracted 215 [BTC] compared to 235 BTC in August 2022”, which was “primarily due to a 12% increase in average network difficulty during September.” Argo also stated that they “continue to limit operations at the Helios facility in Dickens County, Texas for periods with high electricity prices” and replaced the Company’s Chief Technology Officer (“CTO”). On this news, Argos’ ADS price fell $0.27 per ADS, or 10.98%, to close at $2.19 per ADS on October 11, 2022. Argos’ ADSs are now trading below $2 per ADS, significantly below the company’s IPO price.
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Aaron Dumas
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About Robbins LLP: A recognized leader in shareholder rights litigation, the attorneys and staff at Robbins LLP have been dedicated to helping shareholders recover losses, improve corporate governance structures, and hold corporate executives accountable for their wrongdoing since 2002. To be notified if a class action lawsuit against Argo Blockchain plc settles or to receive free alerts when business executives commit wrongdoing, sign up to Stock Watch today.
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