Argo blockchain crisis: share price plummets 50%
Argo blockchain crisis: share price plummets 50%
Mining

Argo blockchain crisis: share price plummets 50%

By Andrea Porcelli - 4 Nov 2022

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The bear market hits Argo Blockchain and causes its share price to fall drastically.

The cryptocurrency miner has taken a really bad hit, a -50% drop that will lead to a collapse of the platform if it does not raise additional funding.

The attempt to seek more funding in the next 12 months sounds almost like a last resort. 

Over the past three months, 4 analysts who have provided 12-month target prices on Argo Blockchain estimate that the company has an average target price of $5.31, with a high of $10 and a low of $0.25.

If the share price of Argo Blockchain does not rise, the company will be forced to downsize

“If Argo fails to secure additional financing, it would have negative cash flow in the short term and would need to downsize or cease operations.” 

The statement from the blockchain company hints at many things about the company’s future. The measures taken, are preventative steps for the funds, so as to maximize liquidity.

On Monday, Argo Blockchain stated that a deal to sell $27 million in capital to fund their mining operations fell through. This means that this blown deal will result in the company spending more than it regularly receives.

While Argo is exploring other financing opportunities, there can be no guarantee that any definitive agreements will be signed or that any transactions will be completed. Should Argo fail to secure any additional financing, it will become cash flow negative in the short term and will be required to downsize or cease operations. The Company is committed to completing such financing transactions to provide the Company with sufficient working capital for its current needs, i.e., for at least the next twelve months from the date of this announcement.

What the Argo Blockchain company is involved in

Argo Blockchain PLC (Argo) is a cryptocurrency mining company based in the United Kingdom. Argo is a mining-as-a-software (MaaS) service provider that makes it easy for customers to mine Bitcoin Gold, Ethereum and other alternative coins (altcoins) through the cloud. The company’s mining infrastructure is located at multiple sites in Quebec, Canada and includes about 18,000 mining machines.

Argo, along with Bitfarms, became one of many cryptocurrency mining companies that decided to sell independently mined Bitcoin during the bear market of 2022

Argo is the company that believes most in mining

Until recently, the Argo project related to mining had led to crazy results, making the company a leader in the mining industry.

It is enough to think about the figures for 2020, where Argo Blockchain throughout the year mined as many as 2369 Bitcoin (BTC), a really important figure that made the company financially solid. 

“At Argo, we continue to prioritize the efficiency of our mining operations, and this allowed us to increase our revenue by 23 percent this month and achieve our highest mining margin since halving earlier this year.”

Those were the words of Argo’s CEO in 2020, but now the story has changed and Argo Blockchain is almost on the brink.

Canaccord analyst Joseph Vafi confided to clients in a research note:

“If it really can secure the financing to negotiate a power purchase agreement [, we believe Argo Helios’ flagship facility could be better monetized.

Argo Blockchain and its sustainable project

The London-based company has always distinguished itself through its willingness to act with a sustainable product. In 2021, it was one of the few companies to sign the Crypto Climate Accord (CCA) and was the most green-conscious mining company.

“We are pleased to provide this report, which highlights the progress we have made in our commitment to sustainability and Argo’s climate strategy, and plan to maintain our climate-positive status. For our team, sustainability is an integral part of our business model. This report highlights Argo’s focus on improving mining efficiency, reducing our impact on the planet and increasing our overall productivity.”

At the heart of Argo’s project is sustainability in energy efficiency, heat recycling, and waste reduction. Thanks in part to collaboration with agencies and municipalities. 

The idea of a sustainable mining project, in a time of energy crisis, could have been the perfect turning point for the crypto world.

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