Nikolas Kessler of the investor magazine “Der Aktionär” takes a close look at the shares of Argo Blockchain PLC (ISIN: GB00BZ15CS02, WKN: A2JR3A, stock symbol: 0XP, LSE symbol: ARB) in a current stock analysis.
After the FTX debacle, fear of a wave of bankruptcies hung over the crypto industry like the sword of Damocles. Mining company Argo Blockchain has now been able to avoid impending insolvency thanks to a deal with crypto bank Galaxy Digital. The title reacted with a leap of joy, which should be assessed with caution.
As the two companies confirmed on Wednesday, Argo Blockchain is selling the Helios bitcoin mining farm in Dickens County, Texas to Galaxy Digital for $65 million. As part of the deal, the mining machines installed there – 23,619 Bitmain S19J Pro computers – would initially remain the property of Argo Blockchain and continue to be operated by the company.
However, the mining equipment is part of the security for a new $35 million loan that Galaxy Digital is also providing to the company. In recent months, Argo Blockchain has already sold off a large chunk of crypto holdings in order to be able to repay Galaxy’s previous loans.
With the new capital, the struggling mining company wants to repay or reschedule other loans. According to Peter Wall, CEO of Argo Blockchain, this will reduce debt by $41 million. In addition, the balance sheet and liquidity should be strengthened in order to be able to continue operational mining activity even in the current bear market.
While crypto financial service providers and trading platforms have come under particular scrutiny since the collapse of FTX, vultures have been swirling around many mining companies for months. Because in addition to falling crypto prices, they would also face massively increased energy costs. Argo Blockchain therefore returned an SOS in October. The company’s shares then accelerated their descent massively and recently traded in Frankfurt at prices of just three cents – a 97% drop from the start of the year.
News of the deal with Galaxy Digital briefly catapulted the price up 10 cents on Thursday. About an hour before the start of trading on the New York Stock Exchange, it was still around 125% higher in Germany at around eight cents.
Although Argo Blockchain has so far avoided impending insolvency, given the massive losses of the past few months, today’s price surge is just a drop in the ocean. Investors who have been there for more than six months would still be sitting on a near total loss.
To get back on its feet operationally and financially, Argo Blockchain depends on a lasting trend reversal in the crypto market – and that is not yet in sight in the short to medium term. Investors should therefore continue to avoid the crypto penny stock, according to Nikolas Kessler of the investor magazine “Der Aktionär” in a current stock analysis. (Analysis of 28/12/2022)
Notes on conflicts of interest:
The CEO and majority owner of the publisher Börsenmedien AG, Mr. Bernd Förtsch, has taken direct and indirect positions in the following financial instruments mentioned in the publication or related derivatives which may benefit from any price movements resulting from the publication : Bitcoin, Galaxy Digital Assets.
The editor-in-chief of the publisher Börsenmedien AG, Mr. Leon Müller, has taken direct and indirect positions in the following financial instruments mentioned in the publication or related derivatives which may benefit from any price movements resulting from the publication: Bitcoin.
The author holds direct positions in the following financial instruments mentioned in the publication or related derivatives that may benefit from any price movements resulting from the publication: Bitcoin.
Please also note the information on the disclosure obligation in the event of conflicts of interest within the meaning of Directive 2014/57/EU and the corresponding European regulations under the following link.
Argo Blockchain Stock Exchanges:
Tradegate Stock Price Argo Blockchain:
EUR 0.0754 +74.54% (28.12.2022, 16:19)
LSE Stock Argo Blockchain Stock Price:
£5.67 +51.20% (28.12.2022, 16:04)
Argo Blockchain ISIN share:
WKN Argo Blockchain Stock:
Argo Blockchain Stock Symbol:
LSE Stock Symbol:
Brief profile of Argo Blockchain PLC:
Argo Blockchain PLC (ISIN: GB00BZ15CS02, WKN: A2JR3A, Ticker Symbol: 0XP, LSE Symbol: ARB) is a cryptocurrency mining company. Argo is a mining-as-a-software (MaaS) service provider that allows customers to mine Bitcoin Gold, Ethereum, and other alternative coins (altcoins) through the cloud. The UK-based company’s mining infrastructure is located in several locations in Quebec, Canada, and includes approximately 18,000 mining machines. (28.12.2022/ac/a/a)
Disclosure of Potential Conflicts of Interest:
You can consult the possible conflicts of interest on the site of the creator/source of the analysis.