Argo Blockchain Cancels £24 Million Funding, Shares Plunge 46%

On Monday, Argo Blockchain (LSE: ARB; NASDAQ: ARBK) announced the crypto mining company could not honor the previously agreed non-binding terms to approximately £24 million ($27 million) funding, which was raised with the subscription of ordinary shares.

“The Company no longer believes that this subscription will be consummated under the previously announced terms. Argo is continuing to explore other financing opportunities,” the company stated.

The announcement's impact is clearly reflected in the publicly traded share price of the company. The value of each company share plunged by almost 46 percent since the opening of the trading on Monday.

Argo is one of the significant industrial cryptocurrency mining companies and is continuing to strengthen its infrastructure. It increased its hashrate capacity by 38 percent to 2.2 EH/s from 1.6 EH/s at the end of 2021 and then increased to 2.5 EH/s.

It even received financing of up to $70.6 million (£56.3 million) from NYDIG for securing BTC mining equipment.

New Strategy

Argo is now changing its business strategies, focusing on maximizing liquidity and preserving cash. It even sold 3,843 new-in-box Bitmain S19J Pro machines representing around 384 PH/s of total hashrate capacity. The sale brought in about £4.8 million ($5.6 million).

“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 consummated,” the company added.

“Should Argo be unsuccessful in completing any further financing, Argo would become cash flow negative in the near term and would need to curtail or cease operations.”

The company's goal with such financing transactions is to generate sufficient working capital for its present requirements, which is for at least the next twelve months.

The declined price of Bitcoin and other cryptocurrencies has also made a dent in the revenue of Argo. After its net income jumped by 2,033 percent in 2021, the revenue slid 14 percent in the next six months to £26.7 million, along with a pre-tax loss of £36.9 million.