Argo Blockchain (LON: ARB) (NASDAQ: ARBK) shares are down 21% in London this morning. ARB shares have dropped on the news of an institutional placing of shares. This does, we have to admit, strike us as odd as we're fairly certain that the future isn't bright for crypto companies, nor even the market as a whole. As we discussed with Coinbase the SEC seems to be gunning for the market and insisting it's all about securities law. Something that would kill rather a lot of activity. Maybe it's possible to think that Bitcoin mining itself won't be affected but we'd be surprised if that turned out to be true in the end.
Still, Argo went ahead and raised more money: “Argo Blockchain PLC, a global leader in cryptocurrency mining (LSE: ARB; NASDAQ: ARBK), announces the successful pricing of the non-pre-emptive placing of new ordinary shares of £0.001 each in the capital of the Company ("Ordinary Shares") following yesterday's announcement (the "Placing").
A total of 51,340,000 new Ordinary Shares (the "Placing Shares") have been placed with institutional investors by Tennyson Securities (a trading name of Shard Capital Partners LLP) ("Tennyson) at the previously announced price of 10 pence per Placing Share (the "Placing Price") raising gross proceeds of approximately £5.134 million. Concurrently with the Placing, retail investors have subscribed in the separate offer made by the Company via the PrimaryBid platform for a total of 6,160,000 new Ordinary Shares (the "Retail Offer Shares") at the Placing Price (the "Retail Offer") raising gross proceeds of approximately £616,000.”
Well, if people want to put more and new money in that's their choice. We're just terribly uncertain about the value of bitcoin itself, therefore of attempts to mine it.
Argo Blockchain share price from London Stock Exchange
We have a possibly unconventional view of Argo. Which is that it's not actually something to invest in at all. It's something to trade. Something to trade has a value, of course it does, but that's the thing to concentrate upon. As we said about Argo: “The other two things we might want in a share to be trade - not invested in, but traded - is that there be a regular stream of news which might prompt price changes. For Argo Blockchain that's the monthly report on coins mined. That February report had 5.7 BTC mined a day for example. OK, it's easy enough to then look back at previous mining expenses then compare with the Bitcoin price in that month. That gives a likely idea of income and so profits - if any. “
Now we, just because we think this way, think that BTC is not going to rise substantially again. We think the game's up given that SEC action on such much of crypto. OK, we could be wrong on that but it does inform the next point. Which is that Argo Blockchain is something to trade, it's a leveraged option on the Bitcoin price. Play with it that way, if at all.
