Why Bitcoin- And Ethereum-Related Stock Argo Blockchain Is Falling Today

Argo Blockchain PLC - ADR ARBK shares are trading lower by 10.90% to $2.86 Monday morning after Barclays downgraded the stock from Overweight to Equal-Weight and lowered its price target from $7 to $3. The company last week announced strategic actions to strengthen its balance sheet.

What Happened?

Among the strategic actions Argo announced:

• Argo signs LOI to amend existing equipment financing agreement
• Argo plans to sell 3,400 mining machines for cash proceeds of £6.0 million ($6.8m)
• Argo intends to raise approximately £24 million ($27m) via Proposed Subscription with a strategic investor

See Also: US-China Tensions Aggravate: Chinese Chipmakers Bleed As US Sharpens Its Knives

As previously reported on September 9, Argo Blockchain says the company has seen headwinds from the price of both natural gas and electricity caused by the geopolitical situation in Europe and low levels of natural gas storage in the United States.

These factors, coupled with the decline in the price of Bitcoin since March 2022 and the increased mining difficulty, have reduced the company's profitability and free cash flow generation.

Argo Blockchain says 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 more favourable short term power purchase agreement with a new electricity provider.

Argo Blockchain says the company remains optimistic about securing a long term, low-collateral, fixed price PPA and is continually reviewing its other expenditures to identify and take additional steps to manage the company's costs.

According to data from Benzinga Pro, Argo Blockchain has a 52-week high of $21.00 and a 52-week low of $2.86.