Argo Blockchain Crashes As Investor Rejects Proposed Capital Injection From

© Reuters

Geoffrey Smith — Shares Blockchain Argo (LON:) fell on Monday after the London-based cryptocurrency miner said it might have to stop trading after a planned capital injection by a new strategic investor fell through.

Argo Blockchain shares fell over 52% after the company said it “no longer believes this subscription will be completed on previously announced terms.”

The deal, as outlined in a letter of intent last month, sees the buyer receive an unspecified stake in $27 million worth of new shares, easing an increasingly serious liquidity crisis.

The company said it continues to explore other funding opportunities, but warned that if it cannot find other sources of cash, “Argo will have negative cash flow in the near future and will have to reduce or cease operations.”

Argo’s stock surged in 2020 as the company reinvented itself as a cryptocurrency miner, cashing in on the pandemic digital currency boom. It has now traveled around the world, returning to early 2020 levels as demand for crypto has slumped this year amid rising fiat yields.

Meanwhile, it is selling off its hard assets at an ever-increasing pace. Argo said on Monday that it has sold 3,843 new Bitmain S19J Pro machines, representing ~384 PH/s of total hashing power, for approximately $5.6 million in cash. These machines are the latest batch of Bitmain’s initial order, scheduled for installation in October 2022. As a result, Argo stated that its total hash power 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 cars.

Cryptocurrency miners have suffered not only from falling demand for digital currency, but also from the rising cost of the energy needed to mint it. Another miner, Compute North, went bankrupt in September with $500 million in debt. Basic scientific (NASDAQ :) also warned that it might consider filing for bankruptcy.

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