By Michael Scott
Embattled mining firm Argo Blockchain filed a motion to suspend trading activities listed within the Nasdaq exchange. The Bitcoin mining firm has its unsecured notes and stock listed on the London Stock Exchange and Nasdaq.
Argo Temporary Stops Trading on Nasdaq
Argo promised to issue a major announcement before the resumption of Wednesday trading on January 4. However, the December 27 suspension notice indicated that the temporary halt only affects shares listed on the Nasdaq.
The update scheduled for December 28 will feature inside information and futuristic statements regarding Argo’s financial performance, plans, management objectives and business strategy for the firm’s future operations.
The miner’s filings to the London Stock Exchange (LSE) on December 12 admitted encountering financial turmoil that hinders its operations. The document added that Argo would liquidate several crypto assets.
The miner would resume trading in the LSE on December 13; it had previously halted owing to financial challenges. Although it never filed for bankruptcy, Argo unintentionally disclosed draft documents signaling imminent collapse.
The suspension of Argo’s trading in Nasdaq coincides with many crypto miners considering restructuring operations. The restructuring arises from the plummeting bitcoin price.
Argo Bailout Attempts
Argo’s attempts to resolve the liquidity crisis coincide with efforts undertaken by other crypto miners. In particular, other miners are restructuring their obligations to overcome the inadequacy of cash to sustain operations amidst the crypto market slowdown. A filing by Argo in early December confessed advanced negotiations with an anonymous party to rescue its business operations from insufficient cash. The company stated that the talks would enable Argo to avoid chapter 11 bankruptcy filing.
Argo demonstrated that the negotiations featured plans to dispose of particular assets to an unnamed third party. In addition, the miner is set to undertake equipment financing deals to improve its balance sheet position and resolve the liquidity crunch.
Source of Liquidity Crisis Revealed
The insufficiency of cash prompted Argo to consider alternative funding. Declining Bitcoin prices necessitate such amidst rising energy rates. Such challenges have caused a steady decline in the miners’ stick by 95% in 2022.
Earlier in June, the company disposed of Bitcoin reserves to fund its operating expenses. However, the lower BTC prices could have yielded more reserves. Also, the miner failed to conclude a $27 million fundraising in October, causing a sharp decline of 40% in its stock price.
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