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Argo
Blockchain, the publicly listed Bitcoin miner from Wall Street (NASDAQ: ARBK)
and London (LSE: ARB), has secured £4.2 million ($5.3 million) through a share
subscription. The BTC mining company issued approximately 76.9 million new
ordinary shares at 5.5 pence per share to an institutional investor.
Wall Street Bitcoin Miner Argo
Blockchain Raises £4.2M in Share Placement
The fresh
capital will support multiple strategic initiatives, including the potential
relocation or divestment of mining equipment from its Helios facility in Texas,
while maintaining Bitcoin mining operations in Quebec. The funds will also
advance the company’s planned expansion into high-performance computing (HPC).
“This
subscription strengthens our balance sheet as we move forward with our HPC
opportunity at Baie-Comeau and Helios fleet movement,” said Thomas
Chippas, CEO of Argo Blockchain.
Argo is one
of several Wall Street mining companies seeking new revenue streams by shifting
focus to HPC and AI. This strategic move aims to diversify operations and
capitalize on the growing demand for computational power in the AI sector.
Matthew Sigel, head of digital assets research at investment management firm
VanEck, projects that this transition could
generate $38 billion in value for mining companies by 2027.
The
transaction will be executed through a cashbox mechanism, with the new shares
ranking equally with existing ordinary shares. Following the subscription,
Argo’s total issued share count will increase to 717.2 million shares.
Challenging Market for
Bitcoin Miners
The funding
comes as Argo faces challenging market conditions, having reported a pretax
loss of $38.8 million in the year to date, with mining margins narrowing to 8%
in the third quarter of 2024, down
from 58% in the previous year.
“The third
quarter was a difficult quarter for BTC miners, including Argo,” added Chippas.
“It is positive that we have seen improvement in BTC mining economics in
October, and that this has continued into November.”
A small
consolation for Argo is that it is not alone in reporting losses. Industry
leaders such as Bitfarms, Marathon Digital Holdings, TeraWulf, and HIVE Digital
Technologies also
faced challenges in maintaining profitability during Q3 2024. The sole
exception was Hut 8, which managed to achieve modest
net profit of $0.9 million.
Despite
Bitcoin reaching record highs, nearing $100,000 last month and climbing 125%
year-to-date, Argo’s shares on Wall Street and the London Stock Exchange have
significantly declined. Their value has dropped by over 70% since the beginning
of the year.
This article was written by Damian Chmiel at www.financemagnates.com.
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