Argo Blockchain shares explode after the company applies for US listing

Argo Blockchain shares are soaring this morning after the British crypto mining company filed to list its shares in the United States over-the-counter market.

Shares of the London-based firm are gaining 80% so far in mid-day stock trading activity at 36p per share as the company is set to trade under the ticker ARBKF in the US OTCQB Venture Market.

The firm’s Chief Executive, Peter Wall, commented: “We want to make Argo available to US markets in order to gain access to a broader investor base and enhance our visibility in North America. We are already trading on OTCPK and we anticipate a full OTC listing with wider investor reach in the coming days”.

Argo stock has already been moving higher since 16 December as the value of Bitcoin has been rising steadily above the $20,000 threshold. Since then, Argo Blockchain (ARB) shares have gained 222%, including today’s uptick, while they accumulate a 239% gain since the year started.

The company, which operates three large crypto mining facilities in Europe, specializes in mining Bitcoin (BTC) and Zcash. The firm reported on 3 December that it effectively mined 115 Bitcoin Equivalents during November compared to 126 Bitcoin Equivalents it mined during the month of October amid “changes in mining difficulty”.

However, soaring cryptocurrency prices during the period ended up pushing the company’s mining revenue to £1.48 million during the month – representing a 23% jump in revenues compared to the £1.2 million the firm brought the month before.

So far this year, the company has mined a total of 2,369 Bitcoin while they reportedly held 178 in BTC and BTC Equivalents at the end of November – valued at approximately $4.8 million based on Bitcoin’s trading price today.

By the end of last month, Argo had a total of 16,000 mining devices in operation. Meanwhile, the firm’s market capitalisation has increased to £55 million ($74 million) amid today’s uptick.

A successful listing in an American exchange will probably drive further liquidity to the stock while the company could be aiming to seize the positive momentum seen by cryptocurrencies lately to launch a share offering.

A closer look at Argo Blockchain’s fundamentals

Argo Blockchain’s revenues have surged strongly since the company first reported its accounts in 2018, moving from £1 million back then to roughly £8 million by the end of its 2019 fiscal year.

Meanwhile, the company had a total of £24 million in assets including £15 million in fixed assets – mostly mining equipment – while it had only £4 million in current liabilities and no long-term debt.

The firm’s profitability is intimately tied to the price of the cryptocurrencies it mines and the efficiency of its mining equipment, which makes it highly sensitive to changes in the price of these digital assets. This situation resembles that of oil companies and other similar ventures, whose revenues largely depend on the price of a certain commodity.

Argo managed to shift its business model from providing mining services to third parties to become a mining company, which allowed the firm to grow its revenue roughly 11 times by the end of 2019, compared to the previous year.

Losses, on the other hand, were also trimmed during the period, moving from £4.12 million in 2018 to as little as £690,000 by the end of its 2019 fiscal year.

This change in the firm’s scope has positioned the business favorably to reap the benefits of higher cryptocurrency valuations and, if that uptrend is to continue, the company will likely see a much stronger upside in the months to come.