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Argo Blockchain (ARB) launches a new US IPO

Diagonal chain made of zeros and ones. Cryptocurrency and mining.
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The Argo Blockchain (LSE:ARB) share price is rising following the announcement of a new US IPO. The company intends to issue 7.5 million American Depositary Shares (ADR). These will have the equivalent value of 75 million ordinary shares listed in the UK.

So what?

The process of issuing these new shares has only just started. As such, the IPO has yet to be approved for listing on the NASDAQ exchange under the ticker of ARBK. The purpose of this IPO is to raise additional capital to fund its ongoing expansion plans. Argo Blockchain began constructing a new mining facility in Texas earlier this year, which is expected to provide an additional 200MW of Bitcoin mining capacity by mid-2022.

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The closing ARB share price on the day of the announcement was 145p. This indicates that a total of £109m could be raised if the US listing gets approved and American investors are interested in owning a piece of Argo Blockchain.

The Argo Blockchain ARB share price has its risks

What’s next for the share price?

Assuming the IPO is a success, Argo Blockchain would have raised approximately £127m this month. That includes the recent flood of cash from its newly secured £18m loan from Galaxy Digital LP.

According to its latest interim report, the company has approximately £48m of short-term obligations to satisfy. Therefore, this newly raised capital substantially improves Argo Blockchain’s liquidity. But whether this will be sufficient to cover its future growth expenses has yet to be seen. Suppose the price of Bitcoin and other cryptocurrencies begins to waver? In that case, the company may have to raise additional capital in the future.

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Zaven Boyrazian has no position in any of the shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

The content in this article is provided for information purposes only. It is not intended to be, neither does it constitute, any form of investment advice. Bitcoin and other cryptocurrencies are highly speculative and volatile assets, which carry several risks, including the total loss of any monies invested. Readers are responsible for carrying out their own due diligence and for obtaining professional advice before making any investment decisions.

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