Argo Blockchain Crashes as Investor Pulls Out of Proposed Capital Injection

The deal, as outlined in a letter of intent last month, would have seen the buyer take an unspecified stake in the form of new shares worth $27 million, easing a liquidity crunch of more and more serious.

The company said it was continuing to explore other financing opportunities, but warned that if it was unable to find other sources of cash, “Argo would become cash flow negative in the near term and would have to reduce or cease its activities”.

Argo stock had exploded in 2020 as the company reinvented itself as a pure-play cryptocurrency miner, cashing in on the pandemic digital currency boom. It has now made a round trip, falling back to its early 2020 levels, as demand for crypto has declined this year amid rising fiat currency yields.

Meanwhile, it is selling off its hard assets at an increasingly rapid rate. Argo said on Monday it sold 3,843 new Bitmain S19J Pro machines, representing ~384 PH/s of total hashrate capacity, for approximately $5.6 million in cash. These machines are the last batch of Bitmain’s original order scheduled for installation in October 2022. As a result, Argo said its total hashrate capacity remains at 2.5 PE/s.

This development suggests a growing degree of distress within the company: in its previous plans, it had hoped to raise $7 million by selling just 3,400 machines.

Cryptocurrency miners have suffered not only from the collapse in demand for digital currency, but also from the rising costs of the energy needed to mint it. Another miner, Compute North, went bankrupt in September due to $500 million in debt, while Core Scientific (NASDAQ:) has also warned that it may be considering bankruptcy.