Argo Blockchain (ARBK) Stock: Why It Dropped 23.02%

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  • Argo Blockchain (ARBK) stock price fell 23.02% in the last trading session. That is why.

Argo Blockchain (ARBK) stock price fell 23.02% in the last trading session.

Why: Argo Blockchain has announced several strategic actions aimed at bringing additional capital to the business and ensuring that the business has the working capital necessary to execute its current strategy and meet its obligations over the next twelve months.

As previously reported on September 9, 2022, the company has experienced natural gas and power price headwinds caused by the geopolitical situation in Europe and low natural gas storage levels in the United States. And these factors, coupled with the decline in the price of Bitcoin since March 2022 and the increasing difficulty of mining, have reduced the company’s profitability and free cash flow generation.

The company has been proactive in curtailing operations at its flagship Helios facility in Dickens County, Texas during periods of high power prices and securing a short-term power purchase agreement (PPA) more favorable with a new electricity supplier. And the company remains optimistic about securing a long-term, low-guarantee, fixed-price PPA and is continuously reviewing its other expenses to identify and take additional steps to manage the company’s costs.

In addition to the company’s actions to reduce costs and preserve capital, Argo’s board of directors made the decision to pursue a combination of financing opportunities to strengthen the company’s balance sheet. Based on its cost reductions and the assumed completion of the transactions described below on the terms set forth in the Letters of Intent and the currently anticipated timeline, the Company believes that its working capital will be sufficient for its current needs, that is, for at least the next twelve months from the date of this announcement. The Company and the Board of Directors remain of the view that following these strategic steps, Argo will be both well positioned and capitalized to weather the current period of market dislocation. The Board of Directors and the Company will continue to closely monitor the Company’s cash requirements and available sources of capital.

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