Crypto miner Argo Blockchain on Friday announced selling 3,400 mining machines for $6.8 million and raising nearly $27 million via a proposed subscription with a strategic investor to strengthen its balance sheet. Also, the miner signed a letter of intent to amend the existing equipment financing agreement to release $5.7 million in cash and modify existing loans.
As a result, Argo Blockchain shares plummeted nearly 20% as investors lose confidence in the leading Bitcoin miner. The share price currently trades at 26.20 GBP.
Argo Blockchain in a press release on October 7 announced strategic actions to bring additional capital to business and working capital to meet obligations for the next 12 months. The company’s profitability and free cash flow generation suffered due to higher natural gas and electricity costs, as well as declining Bitcoin prices.
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.”
In order to strengthen the balance sheet, Argo Blockchain plans to sell 3,400 Bitmain S19J Pro mining machines for $6.8 million and raise nearly $27 million via a proposed subscription with a strategic investor. Moreover, the company will amend its existing equipment financing agreement with NYDIG to release restricted cash. Also, modifying the amortization schedule for $84 million in outstanding loans.
Shares of Argo Blockchain tumbled 22% to 26.20 GBP on Friday as a result of the announcement.
Bitcoin miners’ revenue has dropped significantly this year as Bitcoin price tumbled below $20,000. Also, the rising hash rates and mining difficulty increase risks for miners.
Bitcoin mining and profits reduced as miners continued selling their BTC to sustain the financial crunch. Also, it even forced miners to sell their mining equipment, causing Bitcoin prices to dive further. The BTC price is currently trading at $19,989, down over 1% in the last 24 hours.
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