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Gungun Bhatia
Oct 31, 2022
by Gungun Bhatia

Bitcoin Miner Argo Failed to Raise $27 Million Fund, Shares Fall

Argo shares

Table of contents

  1. Argo Seeks Further Financing
  2. Core Scientific to Become Bankrupt by 2022
Argo Blockchain's (ARB) attempt to secure $27 million from a major shareholder has fallen through. Recently, the company entered into a non-binding letter of intent (LOI) with a prominent shareholder to fund around $27 million ($24 million) through the subscription of ordinary shares. The company does not consider the completion of the subscription on the previously disclosed terms. Argo is still looking at more funding sources. Additionally, the company has taken actions to increase liquidity and protect cash. The company's overall hash rate capacity thus stays at 2.5 EH/s.

Argo Seeks Further Financing

Argo claims it is looking into alternative financing possibilities in light of the original finance plan's failure. However, the revelation can have some short-term adverse effects on the business. The firm warned that if it couldn't secure further funding, it would soon have a cash flow deficit and have to scale back or terminate operations.

When costs go beyond revenues, a business has negative cash flow. The report on Monday is the most recent in a line of unfavorable developments for the Bitcoin miner. Following the announcement, the company's share price fell by more than 50%. Year to date, shares of Argo have decreased by 91%. In August, the business drastically reduced its hash rate growth forecast by 42%.

Core Scientific to Become Bankrupt by 2022

Bitcoin miners are dealing with the weak market and rising energy prices, and Argo's problems are a prevalent issue among them. Last week, amid rumors of a likely bankruptcy filing, Core Scientific, another Bitcoin mining business, suffered a 75% decrease in the price of its shares. The largest bitcoin miner in the world, Core Scientific (CORZ), forecast that the cash reserves will exhaust by the year's end, if not sooner. In a filing on Thursday, the company acknowledged that there was serious doubt over its ability to continue operating for an adequate period. The business stock, which went public in January, fell by around 30% in U.S. pre-market trade.

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Bitcoin Miner Bitcoin Argo Blockchain (ARB) letter of intent (LOI)
Bitcoin Miner Argo Failed to Raise $27 Million Fund, Shares Fall
Gungun Bhatia
Gungun is an enthusiastic writer that likes to create content for various aspects of the blockchain and crypto industry. She carries out extensive research and provides readers with informative and high-quality material.

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