2022 ended on a high note Argo Blockchain (ARBK)The stock has risen 110% in the last five sessions of the year. Still, in an example of how damaging this year has been for struggling crypto miners, even after making huge profits, the stock still posted a 91% loss this year.
So why did stock prices soar? Well, the company seems to have been thrown a lifeline by a prominent crypto mogul.
Galaxy Digital, the cryptocurrency investment fund of billionaire Mike Novagratz, has invested in the company’s Helios mining facility in Dickens Country, Texas, a 200MW immersion bitcoin facility that has been in operation since May 2022. (including mining facilities) for $65 million. The company will also take out a new $35 million loan for him, using his Argo mining hardware as collateral.
The deal includes disposing of all of Argo’s current debt, and the company will sign a two-year hosting deal with Galaxy to run 23,619 Bitmain S19J Pro machines at its facility without interruption. is.
“This transaction preserves the company’s current operating structure, reduces the burden of debt and prevents filing for bankruptcy,” HC Wainwright said. Kevin Dede.
But that doesn’t mean the company is out of the woods yet. “Despite a clearer view of Argo’s balance sheet, the company’s income statement remains opaque. Given that we have not yet implemented and we do not have any insight into the new cost of debt, we expect this to continue to fluctuate.”
So with September quarter numbers still out of the light and Argo’s P/L “almost out of sight,” Dede prefers to sit on the sidelines for now. Analysts plan to reassess the model once the September numbers are released, and the company can provide a “baseline for hosting cost calculations.” Dede therefore repeated its neutral rating without offering a fixed price target for the stock. (to see Dede achievements, click here)
Elsewhere, the stock received four more holds and two sells from Wall Street pundits, and the consensus view here is a moderate sell. The average target is $0.81, suggesting a 25% decline in the stock over the next few months. (See Argo Blockchain stock price prediction on TipRanks)
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Disclaimer: The opinions expressed in this article are those of the featured analyst only. This content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.