Troubles at Argo Blockchain (Nasdaq:ARBK) continue to mount as the cryptocurrency miner faces the risk of bankruptcy filing in the U.S. as it lacks the required liquidity levels to support operations. In order to temporarily fix the cash constraints, Argo is planning to sell some assets and engage in an equipment financing transaction.
Furthermore, on December 9, Argo stock was suspended from trading on the London Stock Exchange and Nasdaq. It is worth mentioning that the suspension is a result of some kind of misunderstanding. Argo said that “certain draft materials were inadvertently published as a test page on the company’s website,” leading to its suspension.
Following the news, Roth Capital analyst Darren Aftahi reiterated a Sell rating on ARBK stock with a price target of $0.25, implying 63.7% downside potential from the current level.
The analyst believes that the sale of assets can lower Argo’s mining hash rate from its current levels. Moreover, Aftahi fears that this “could lead to additional risks from insufficient mining to offset costs, especially without a fixed purchase-price agreement (PPA) for power.”
Argo has been making efforts to strengthen its balance sheet since October 2022. At the time, it announced plans to sell mining machines as well as a proposed subscription with a strategic investor to raise about $27 million. However, the deal could not materialize, which led to the sale of some more machines.
Is Argo Blockchain a Buy, Hold, or Sell?
While Aftahi has a bearish stance on Argo, the other Wall Street analysts remain neutral. ARBK stock has a Hold consensus rating based on one Buy, four Holds, and two Sells. The average ARBK price target of $1.84 implies a 167.4% upside potential to current levels.
