In a recent financial move, Argo Blockchain (ARB), a prominent crypto miner, has bolstered its coffers by selling new shares, raising a staggering 5.7 million British pounds (about $7.5 million). The funds accrued are reportedly being funnelled into alleviating the weight of the company’s debts.
This can be seen as an optimistic step towards stabilizing ARB’s financial status. However, the question arises if this step is wholly positive; shares sold constitute approximately 12% of the pre-sale market cap of the company and were let go at a discount of approximately 14%, which might have potential implications on investor sentiments.
April saw the London-based company report a significant full-year net loss of 194.2 million pounds, a striking contrast to a net income of 30.8 million pounds in the previous year. This downward spiral is largely attributed to the sharp depreciation in the value of Bitcoin in the preceding 12 months. This led to several similar companies battling to stay afloat in the unpredictable tide of the crypto market.
ARB smartly sidestepped the calamitous fate of bankruptcy seen in companies similar to itself by deciding to sell its Helios mining facility in Dickens Country, Texas off to Galaxy Digital at a cost of $65 million. Besides this, the company also secured a $35 million loan from the financial-services firm owned by crypto-enthusiast, Michael Novogratz, offering its mining equipment as collateral.
However, gains from such strategic decisions may prove fleeting given the current share price of ARB. Even with the dramatic moves to preserve and grow the company, ARB shares have seen a decline of almost 20% and at the time of writing, are valued at 10.96 pence.
As ARB continues to navigate these turbulent seas, it underlines the inherent volatility and uncertain nature of the crypto market. Observers may note drastic measures by companies to alleviate financial pressure. But the central question remains – are these expedient measures sufficient to counter the unpredictable rises and falls within the crypto world? This becomes an even more pertinent question when one remembers the often-discounted fact that behind the (bit)coin are genuine companies with real-world financial pressures. Will these companies continue to adopt drastic measures to survive, or will they find more sustainable ways to thrive in the crypto superhighway? Time, as they say, will tell.
Source: Coindesk
