On Friday, Crypto miner Argo Blockchain faced a financial crunch and stated that it sold 3,400 mining machines for $6.8 million. It is also raising nearly $27 million via a proposed subscription with a strategic investor to reinforce its balance sheet.
Crypto miner Argo Blockchain on Friday also signed a letter of intent to amend the existing equipment financing agreement. This will release an additional $5.7 million in cash and modify existing loans.
However, Argo Blockchain shares have not taken this news positively, and its shares have tanked by a vast 20%. It indicates that investors have not taken these actions positively and are losing confidence. The share price currently trades at 26.20 GBP.
Argo Blockchain Moves to Reinforce Balance Sheet
In a detailed press release on October 7, 2022, Argo Blockchain said that it wants an influx of fresh capital. This exercise is solely meant to cater to the financial obligations for the coming 12 months. The last few months have seen soaring energy costs, probably due to the Russia -Ukraine war, which has led to the cutting off of Russian Crude supplies courtesy of sanctions imposed by the U.S. and its allies. Coupled with high energy prices, BTC mining activities are no longer profit5able due to falling BTC values.
Peter Wall, CEO of Argo Blockchain, in an official YouTube video, said:
“Our profitability has been squeezed from both sides from higher energy prices from lower Bitcoin prices. The board of directors has made the decision to take a couple of actions. Once we’re fully implemented, it will improve our financial position and put us in a good place to have enough liquidity for the next 12 months.”
Argo Blockchain has no option but to sell 3,400 Bitmain S19J Pro mining machines for $6.8 million and create nearly $27 million via a proposed subscription with a strategic investor.