Argo Blockchain On The Verge Of Bankrupsy

In today's edition of YIYL, (You Invest, You Lose) we had back to the cut-throat mining sector, where math, forward projections, and matching duration with demand are where you live and die. A lesson very few of these miners seem to learn or get right.

I am not saying it's an easy balancing act by any means, the game of mining bitcoin is filled with dangers along the way, so more power to those brave souls, but the truth is very few are going to make it for any long stretch of time.

We've already seen Core Scientific and Iris Energy call time on their operations and it was never going to stop there.

Argo is yet another miner who looks like they are about to call time on its operations when the company accidentally published draft bankruptcy documents to its website. Oef, talk about a fuck up with your marketing, is anyone paying attention to what they're doing these days?

What does Argo do?

Well formed in 2017 a great time to start mining right before the bull run, Argo is one of these so-called "green miners", they had 3 locations in operation in Mirabel and Baie Comeau in Quebec, Canada, and Dickens County, Texas.

Mining on hydro up in Canada and on wind and solar down in Texas.

Cash drying up fast

Argo Blockchain warned earlier this month that it’s threatened by the risk of holding “insufficient cash” to sustain operations going into the next month.

It’s currently in advanced negotiations with an external party to sell some assets under an equipment financing transaction to free up some cash flow and improve its financial position.

What this means is taking out a loan against your company to purchase business-related machinery or keep the lights, on, essentially you are trying to buy some time hoping that if you stay alive long enough price goes up and you can build runway and service your debt.

Raising from the dead

Argo Blockchain was forced to reveal that it is in last-ditch negotiations to raise capital stating that they hope to do a deal and avoid a Chapter 11 filing/

Ago are trying to raise $25–35 million since late August, and when a $27 million equity deal fell through in early November, the miner acknowledged it might soon have negative cash flow.

As a result of the inadvertent publication of bankruptcy documents, the London Stock Exchange and Nasdaq paused which could be a final death blow because you're cut off of market liquidity. Not that there is much appetite for these stocks, but still cash flow in any form is most welcome when you're on your knees.

Talk about the price

It's gotten so bad that trading shares of the company have been suspended. The company’s shares were listed on the London Stock Exchange and the Nasdaq up until Dec. 9.

As you can tell the stock has been absolutely massacred in the last year with its loss dropping pretty much all its value or 98% of it, if you want to be technical, falling from a high of GBP 282 to GBP 3.44.

The company has published a statement saying they requested trading be re-enabled since they had not actually filed for bankruptcy (yet).

Anyone who bought that stock and held it over the last year has been completely cleaned out and even those that got out along the way, I doubt many of them made any profits in the process but rather wanted to stop out losses.

In a bull market, bitcoin mining stocks are high beta to the price of bitcoin and you can bag some healthy exposure for your portfolio, but boy if it turns around you going to get wrecked like a shitcoiner.

Sources:

• coindesk.com
• argoblockchain.com
• blockworks.co

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