We think that investors wanting exposure to bitcoin can find better opportunities than Argo Blockchain elsewhere.
Divesting from Argo into other assets would have the added benefit of avoiding a company that appears to have displayed serious governance failures and has significantly diluted investor shareholdings over the past year.
Argo has diluted shareholders by 52% so far this year with further dilution likely given potential capex requirements of $1.5-2 billion for the Texas project.
We believe that Argo Blockchain purchased land in Texas seemingly for up to 100 times more than the acreage is worth, raising serious governance questions about why this deal was done and who benefited.
We are also concerned that an apparently unreported multi-million dollar legal dispute between Argo and Celsius Network could threaten future bitcoin mining capacity and revenue. Argo leases about 40% of its mining fleet from Celsius.