Shares of crypto miner Argo Blockchain fell after the company revealed that a planned £24 million ($27 million) fundraising would no longer go ahead.
The company, which is listed on both the London Stock Exchange and Nasdaq, said in a statement to shareholders that the plans to raise more cash by selling shares will no longer be carried out under the conditions previously announced.
The company’s share price fell 40% in early trading in the London market after the news, while its New York shares fell 37.5% in pre-market.
“As Argo explores other financing opportunities, there can be no assurance that definitive agreements will be signed or transactions completed,” the statement said.
“If Argo fails to secure additional financing, Argo would become cash flow negative in the near term and would have to scale down or cease operations.”
The $27 million fundraising plan was announced in early September as part of a series of measures to strengthen the group’s balance sheet. At the time, the company said it had entered into a non-binding agreement with an anonymous investor, who had pledged to buy 87 million shares at £0.276 ($0.32) each.
When contacted by Decrypt.
With that deal no longer taking place, Argo said it was exploring options and taking other steps to preserve cash, such as selling its mining equipment. He just sold 3,843 new Bitmain S19J Pro machines for $5.6 million.
Like many other miners, Argo also has has been drain bitcoin reservesin order to improve its balance sheet.
The company, founded in 2017, bills itself as the first climate-positive cryptocurrency miner. Its facilities aim to supply mainly hydraulic, wind and solar energy.
But that hasn’t shielded it from the pressures of rising energy costs. Earlier this month, the band said in a operational update that it scaled back operations at its Helios facility in Texas during times of high electricity prices.
Bitcoin miners face an existential threat
Argo’s woes are just the latest in a series of distress signals from crypto miners struggling to cope with rising costs and hardship.
Last week, one of the biggest players in the industry, Core Scientific, warned that he might run out of money by the end of the year and could resort to bankruptcy proceedings.
Compute North has already taken this step, Chapter 11 bankruptcy filing in September.
With mining difficulty reach new heights while Bitcoin’s value remains stagnant, only those with the most up-to-date equipment stand a chance of making a profit.
Stay up to date with crypto news, get daily updates in your inbox.