Penny Stock ARBK, Closed Up 151.72%
After News That Galaxy Digital Will
Acquire It’s Bitcoin Mining Operation.
Argo Blockchain plc (LSE: ARB; NASDAQ: ARBK; OTCQX:ARBKF) ("Argo") became the second penny stock in two weeks to see a massive move up in price soon after being demoted to trading on the OTC Market, after being suspended by a bigger board exchange.
Yesterday we reported on Starry Group Holdings, Inc., (OTC PINK:STRY) recently being suspended from trading by the NYSE. In that STRY news update, we mentioned that STRY first saw a steep decline after the announcement, which was then followed by a recovery up 500% from the low in just two weeks. In the case of ARBK, the stock was announced as de-listed from NASDAQ just yesterday but it did not see a steep decline prior to running up.
Argo Blockchain plc Came To An Agreement To Have Its Bitcoin Mining Helios Operation Acquired By Galaxy Digital:
The reason for ARBK avoiding a major sell-off soon after being suspended from NASDAQ is that earlier today, Argo Blockchain plc and Galaxy Digital each announced that the companies came to an agreement in which Galaxy Digital will acquire Argo’s Bitcoin mining facility Helios for $65 million. According to the terms of the deal Galaxy will also be acquiring other related operations from Argo Blockchain plc and provide Argo with a $35 million loan as the company restructures. The terms of this deal are interesting because as mentioned in our recent explanation of shell stocks, shell stocks are those in which a company has sold off its assets or business, leaving nothing behind but the ticket symbol that continues to trade without any significant business. It would be interesting to see if ARBK were to fully become a relative shell after this deal because that would make it one of the most highly transparent shells on the market due to the previously filed documentation that was required by NASDAQ in order to previously remain listed. In so doing, if they do end up selling all assets, the stock would be a very appealing reverse merger candidate but it appears more likely that the company will complete a run of the mill restructuring and move the business in a new direction rather than go the asset sales followed by penny stock reverse merger rout, especially being that the company will continue to.
The deal as known will allow Galaxy Digital to continue to build out its growing Bitcoin mining operations while also allowing Argo Blockchain to remain solvent by avoiding bankruptcy, continue to maintain ownership of its mining units in Dickens County, Texas and have cash on hand to enact full restructuring plans.
Due to the cryptocurrency market downturn over the course of almost this entire year, declining prices have hit the Bitcoin mining community hard, causing numerous bitcoin mining operations to fall into bankruptcy. The Argo deal, according to the company, will allow Argo to maintain enough of a capital balance to weather the bear market period.