Argo blockchain, a bitcoin mining firm, has suspended trading of its American depositary shares (ADS) on NASDAQ due to an upcoming Wednesday morning announcement and the closure of the London Stock Exchange for the day. The company anticipates that trading will resume following NASDAQ regulations upon their reopening.
The company released its statement following a tumultuous period of financial struggles and rumors of bankruptcy due to an increase in energy costs, combined with Bitcoin pricing dips.
Argo takes serious measures to restructure its operations
Argo has decided to take drastic steps to reorganize its operations in the face of an unpredictable future for the mining industry. This news is indicative of other companies within this sector taking similar initiatives.
In a filing released earlier this month, the company divulged that it was engaging in “advanced negotiations” with an anonymous third party to ensure its business operations continued due to “insufficient cash.” Conveying optimism and hope, the firm intended to conclude these transactions without filing for Chapter 11 Bankruptcy.
Reportedly, the negotiations entail selling “certain possessions” to an outside entity and entering into a financing agreement for equipment which is anticipated to reinforce its balance sheet and enhance liquidity.
During the majority of 2022, Argo has been seeking to obtain funds due to its vulnerability caused by climbing energy prices and sinking Bitcoin values. Its stock shares have significantly declined in price by over 95% during this same period.
The company started divesting its Bitcoin resources to fund operational costs in June.
In October, Argo’s plan to raise £24 million ($27 million) was thwarted, leaving its stock price in a sharp decline of 40%.
Crypto miners face an uphill battle amidst the rocky crypto landscape
Investors have seemingly lost trust in the market, and Argo is not alone when it comes to restructuring operations.
Greenidge Generation, a mining company facing financial difficulty, announced on the first of this month that there was considerable doubt concerning its ability to remain operational. Greenidge Generation agreed to reduce debts by up to $68 million to alleviate their debt burden and secure solvency for future operations.
Unfortunately, such tactics haven’t been sufficient to revive the fortunes of some. Last week in Texas, Core Scientific- one of the most prominent players in the field- registered for bankruptcy defense under Chapter 11 because of low Bitcoin values and elevated overhead costs.
Source: https://www.cryptopolitan.com/argo-temporarily-halts-trading-on-nasdaq/