Bitcoin Miner Plans Selling Mining Equipment |
It raise close to $27 million through a potential subscription with a strategic partner to improve its balance sheet. The miner also executed a letter of intent to alter current loans and revise the equipment finance arrangement to release $5.7 million in cash. As a result, investors lost faith in the top Bitcoin miner, and shares of Argo Blockchain fell by about 20%. Currently, the share price is 26.20 GBP.
Argo Blockchain Sells 3,400 Mining Rigs Amid Profitability Decline
Argo Blockchain, a cryptocurrency miner, announced on Friday that it would sell 3,400 mining rigs for $6.8 million.
It raise close to $27 million through a potential subscription with a strategic partner to improve its balance sheet. The miner also executed a letter of intent to alter current loans and revise the equipment finance arrangement to release $5.7 million in cash. As a result, investors lost faith in the top Bitcoin miner, and shares of Argo Blockchain fell by about 20%. Currently, the share price is 26.20 GBP.
Argo Blockchain Takes Action to Boost Balance Sheet
In a press statement on October 7, Argo Blockchain outlined strategic efforts to raise more money for the company as well as working capital to meet obligations for the upcoming year. Due to rising natural gas and power prices as well as falling Bitcoin prices, the company's profitability and free cash flow generation decreased.
In a corporate YouTube video, Argo Blockchain CEO Peter Wall stated, "Our profitability has been pushed from both sides by rising energy prices and decreased Bitcoin prices." The decision to take a few actions has been made by the board of directors. It will strengthen our financial situation and put us in a solid position to have enough money for the following 12 months once we're completely implemented.
Argo Blockchain intends to generate close to $27 million through a planned subscription with a strategic investor and sell 3,400 Bitmain S19J Pro mining rigs for $6.8 million in order to enhance the balance sheet. Additionally, in order to free restricted cash, the company will modify its current equipment financing contract with NYDIG. Changing the amortisation plan for 84 million dollars in loans that are still due.
The news caused shares of Argo Blockchain to drop 22% on Friday to 26.20 GBP.
As the price of bitcoin declines, mining profitability declines.
Due to the price of bitcoin falling below $20,000 this year, bitcoin miners' income has decreased dramatically. The risks for miners are also increased by rising hash rates and mining difficulty.
As bitcoin miners continued to sell their BTC to maintain the financial crisis, income from mining bitcoin decreased. Additionally, it forced miners to sell their mining machinery, thus depressing the price of bitcoin. BTC is currently worth $19,950, a decrease of more than 1% over the previous 24 hours.
