The stock price of crypto mining firm Argo Blockchain fell steeply on Monday after the company revealed that its planned $27 million fundraise from a strategic shareholder fell through.
Following the announcement, Argo’s share price plummeted close to 50% on the London Stock Exchange and around 43% on Nasdaq.
“The Company has also taken steps to further maximize liquidity and preserve cash. The company sold 3,843 new-in-box Bitmain S19J Pro machines for cash proceeds of ~£4.8 million ($5.6 million). These machines are the last batch of the original Bitmain order scheduled for installation in October 2022. As a result, the company’s total hashrate capacity remains at 2.5 EH/s,” wrote Argo in a stock exchange filing.
While the company continues to explore alternate financing opportunities, there’s no assurance of the same. In case Argo fails to raise further capital, it “would become cash flow negative in the near term and would need to curtail or cease operations.”
Currently, the blockchain firm is looking for funds to support its working capital requirements for at least the next 12 months.
The plan to raise $27M was first announced in early September among a slew of measures to strengthen the company’s balance sheet. At that time, the firm said that it had signed a non-binding agreement with an undisclosed investor who had agreed to buy up to 87 million shares at £0.276 ($0.32) apiece.
Since the onset of the crypto bear market, Argo Blockchain has been actively selling its self-mined Bitcoins in order to cut debt and support operations.
Several key players in the Bitcoin mining industry, including Core Scientific, Riot Blockchain, and Bitfarms, have struggled to keep up with working capital requirements due to lower BTC prices, higher electricity costs, and other issues.