ArgoBlockchain, a listed Bitcoin miner on Wall Street (NASDAQ: ARBK) and London (LSE: ARB), has secured £4.2 million ($5.3 million) through share underwriting. BTC Mining Company has issued approximately 76.9 million new ordinary shares to institutional investors at a price of 5.5p each.
Wall Street Bitcoin miner ArgoBlockchain raises £4.2m in share issue
Fresh Capital plans to support multiple strategic initiatives, including the potential relocation or sale of mining equipment from its Helios facility in Texas, while maintaining its Bitcoin mining operations in Quebec. The funding will also fuel the company's planned expansion into high-performance computing (HPC). Thomas Chippas, Argo. Source: LinkedIn
“This subscription strengthens our balance sheet as we advance the HPC opportunity in Baie-Comeau and Helios fleet movement,” said Argo Blockchain CEO ThomasChippas.
Argo is one of several Wall Street mining companies seeking new revenue streams by shifting their focus to HPC and AI. This strategic move aims to diversify its operations and take advantage of the growing demand for computing power in the AI field. Matthew Siegel, head of digital asset research at investment management firm VanEck, predicts this shift could create $38 billion in value for mining companies by 2027.
The transaction will be executed through a cash box mechanism and the new shares will rank pari passu with existing common shares. Following the acquisition, Argo's total number of outstanding shares will increase to 717.2 million shares.
Challenging market for Bitcoin miners
The funding comes as Argo faces difficult market conditions, with year-to-date pre-tax losses of $38.8 million and mining margins expected to rise from 58% a year ago to 8.9% in Q3 2024. It is reported that it has decreased by %.
“The third quarter was a difficult quarter for BTC miners, including Argo. It is positive that we saw an improvement in the economics of BTC mining in October, which continued into November,” Tsipas added. Ta.
The small consolation for Argo is that it's not the only company reporting losses. Industry leaders such as Bitfarms, Marathon Digital Holdings, TeraWulf, and HIVE DigitalTechnologies also faced challenges in maintaining profitability in Q3 2024. The only exception was Hut 8, which managed to make a decent net profit of $900,000.
Even as Bitcoin neared $100,000 last month, up 125% since the start of the year to an all-time high, Argo shares on Wall Street and the London Stock Exchange fell sharply. Its value has fallen more than 70% since the beginning of the year.
