The Motley Fool

Is Argo Blockchain’s share price too cheap for me to miss?

Hardware at Argo Blockchain's mining facility at Baie Comeau, Canada
Image: Argo Blockchain

The Argo Blockchain (LSE: ARB) share price has endured a torrid time over the past year. It’s fallen around 30% in value since this point in 2021 and was recently sitting at less than 83p. Its descent inside penny stock territory leaves it trading at a whopping 71% discount to last February’s record closing high of 284p.

Low-cost stocks like Argo Blockchain (and especially penny stocks) are well known for their volatility. So it’s possible that more choppiness could be around the corner. But as a long-term investor and a bargain lover, should I be paying the cryptocurrency miner close attention following its heavy fall?

5 Stocks For Trying To Build Wealth After 50

Markets around the world are reeling from the coronavirus pandemic… and with so many great companies trading at what look to be ‘discount-bin’ prices, now could be the time for savvy investors to snap up some potential bargains.

But whether you’re a newbie investor or a seasoned pro, deciding which stocks to add to your shopping list can be a daunting prospect during such unprecedented times.

Fortunately, The Motley Fool UK analyst team have short-listed five companies that they believe STILL boast significant long-term growth prospects despite the global upheaval…

We’re sharing the names in a special FREE investing report that you can download today. And if you’re 50 or over, we believe these stocks could be a great fit for any well-diversified portfolio.

Click here to claim your free copy now!

On the plus side

Any decision on investing in Argo Blockchain is linked closely to the outlook for Bitcoin prices. Fans of these new-age assets will argue that they will have an important role to play in an increasingly-digitalised world. It’s possible that widespread adoption could be just around the corner.

Over the past year, Argo’s made huge strides to capitalise on this opportunity. It started construction on a 200MW crypto mining facility in Texas which will allow it to turbocharge capacity at low cost. It also agreed to acquire 20,000 Bitcoin mining machines for delivery between the second and third quarters of 2022.

Latest news released last week showed that building remains on course for completion during the first half of the year. Yet Argo Blockchain’s ever-sinking share price shows that the firm’s steady progress isn’t cutting it with investors. Why?

New virtual money concept, Gold Bitcoins

Reasons for worry

Well, first off, the sinking Bitcoin price hasn’t done Argo Blockchain’s share price any favours. Late last week, it slipped to its cheapest since September, to around $41,000 a coin, on fears over Federal Reserve monetary tightening and political unrest in the key mining territory of Kazakhstan.

However, the scale of Argo’s slump is chiefly down to other factors. The business has issued shares and taken on debt over the past year to fund its ambitious growth plans. And market makers worry about the prospect of additional share placings that could dilute shareholders’ interest even further.

Concerns over the way Argo is run have also shaken investor confidence big time. A slew of reports from short-seller Boatman Capital have done little to improve the mood either.

It’s identified a number of causes for alarm, including the firm taking on expensive debt obligations and tapping shareholders while it has cash on the balance sheet. Meanwhile, the business paying £17.5m to secure land for its Texas facility, more than 100 times what Boatman alleges it is actually worth. And finally, Argo is enduring a constant outflow of key decision makers (four of its five directors passed through the exit door in 2021).

I’d buy other growth shares today

It’s possible that Argo could prove to be an exceptional long-term investment. But I’m afraid there is too much noise surrounding the crypto company to encourage me to buy in.

The unpredictable outlook for Bitcoin prices is another reason why I’m happy to sit on the sidelines. I’d much rather buy other UK shares. After all, there’s no shortage of bright growth shares for me to choose from today.

Our 5 Top Shares for the New “Green Industrial Revolution"

It was released in November 2020, and make no mistake:

It’s happening.

The UK Government’s 10-point plan for a new “Green Industrial Revolution.”

PriceWaterhouse Coopers believes this trend will cost £400billion…

…That’s just here in Britain over the next 10 years.

Worldwide, the Green Industrial Revolution could be worth TRILLIONS.

It’s why I’m urging all investors to read this special presentation carefully, and learn how you can uncover the 5 companies that we believe are poised to profit from this gargantuan trend ahead!

Access this special "Green Industrial Revolution" presentation now

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. Royston Wild 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.

Our 6 'Best Buys Now' Shares

Renowned stock-picker Mark Rogers and his analyst team at The Motley Fool UK have named 6 shares that they believe UK investors should consider buying NOW.

So if you’re looking for more stock ideas to try and best position your portfolio today, then it might be a good day for you. Because we're offering a full 33% off your first year of membership to our flagship share-tipping service, backed by our 'no quibbles' 30-day subscription fee refund guarantee.

Simply click below to discover how you can take advantage of this.