In short, the answer to that question is that there is more chance of me shagging Cheryl Cole. But now to the long answer as Argo Blockchain (ARB) has passed the hat around yet again for dumb fund managers to piss away other folks cash for the umpteenth time.
With bitcoin on the up, along with gold, you might expect bitcoin miners to be making hay while sun shines. But are they? Today we have a November trading update from Argo Blockchain (ARB) and as ever it tells us what sounds good but it does not tell us what really matters.
Struggling and drowning in debt bitcoin miner Argo Blockchain (ARB) still describes itself in today’s RNS as “a global leader in cryptocurrency mining.” Heck, if it is a leader, I’d hate to see what one of the laggards looks like. Anyhow the global leader is spaffing shareholders cash has a new CEO, Tomas Chippas who joins with immediate effect. So what is his CV really like?
At last year’s Sharestock, that fellow from Boatman Capital patiently explained how Argo Blockchain (ARB) never had made money and never would make money whatever the bitcoin price. And that is why its shares have a fair value of £0. Of course, as bitcoin surged in the first half of this year some investors with PhDs in ignoring FACTS thought they knew better.
A trading update is meant to inform by posting key metrics. You can therefore assume that any company posting an operational update which excludes the key metrics has something to hide, that is to say bad news. And that brings us to a July operational update from Argo Blockchain (ARB).
These bonds were issued with an 8.75% coupon at $25 and are due to be redeemed in full in just three years. They are either extraordinarily cheap or the equity is extraordinarily overpriced even after its sub-scale fund raise this week. Let me explain.
In the first half of 2022 Argo Blockchain (ARB) burned cash despite the bitcoin price averaging $37,000. With the bitcoin price higher than it was but nowhere near $37,000 let alone a level that would ensure cash neutrality, the company’s shares were ramped up to 17p on the basis of some low grade pumping. After the pump…
Natch, the May operational update from Argo Blockchain (ARB) is highly selective, missing out all the really bad bits. But there is enough there to see that it is not generating cash and that it is creaking under mountainous debt.
