The announcement by Argo Blockchain that its planned fundraising of $27 million was no longer on the cards saw the shares of the Bitcoin miner plummet.

Listed on the Nasdaq as well as the London Stock Exchange, the business issued a statement to shareholders that its plan of selling shares to raise more cash could no longer be completed under the terms announced previously.

Share price drops

After the news, the share price of the company plunged 40% in early London market trading, while pre-market trading in New York saw the company’s shares drop by 37.5%.

The statement from the company said that it was exploring other financing opportunities, but there was no confirmation that it would consummate any transactions, or sign any definitive agreements.

It further said that if Argo was unable to obtain further financing, then it would become cash flow negative and if that happens, it would have to cease its operations.

The plan of raising $27 million in funds had first been announced back in September, as part of a series of measures for strengthening the balance sheet of the company.

The company had stated at the time that it had made a non-binding agreement with an investor, who remained unnamed, and would purchase 87 million shares of the company for $0.32 each.

No details

Representatives of the company did not share any additional details about why the investor would no longer go ahead with the purchase of the shares.

While this deal is no longer going to happen, Argo did add that it was looking at some other options and also taking other measures to preserve its cash, like selling off some of its mining equipment.

The company just raked in $5.6 million from the sale of 3,843 new Bitmain S19J Pro machines. Just like a number of other Bitcoin miners, the company has also sold a lot of its bitcoin reserves for strengthening its balance sheet.

Launched in 2017, Argo has touted itself as a climate-positive crypto mining operation, as its facilities use energy generated via solar, wind and hydropower.

However, this has not kept it safe from the rising costs of energy. The group said earlier this month that high electricity prices had driven it to cease operations in its Helios facility based in Texas.

Existential threat

The bitcoin miner’s woes are the latest in a number of problems that crypto miners have been facing because of the rising mining difficulty as well as energy prices.

Core Scientific, which is one of the biggest players in the industry, warned last week that it could run out of money by the year end, which could result in bankruptcy proceedings.

This has already happened in the case of Compute North, as it filed for chapter 11 bankruptcy back in September.

Bitcoin’s price remains stagnant, but mining difficulty has hit new highs and bitcoin miners who have the latest equipment are the only ones who have a chance of actually making a profit.