SMALL CAP MOVERS: Bitcoin Miner Argo Blockchain Falls Further; Battery manufacturer Invinity Energy Systems jumps
Bitcoin miner Argo Blockchain had a crazy week on the AIM market.
The shares were suspended last Friday when the company inadvertently posted a test page on its website that implied it was filing for bankruptcy.
While a spokesperson assured shareholders that Argo “has not filed for bankruptcy at this time”, the statement acknowledged that it may not have sufficient cash to support its ongoing business operations over the course of the year. next month, although it is in advanced negotiations with a third party to clean up its balance sheet.
Argo Blockchain shares fell today, adding to last Friday’s losses when the bitcoin miner inadvertently posted a test page on its website that implied it was filing for bankruptcy.
On Friday morning, ARB shares are down almost 50% since the suspension. This may sound bad on paper, but it says more about dire market conditions than Argo’s specific business operations.
The crypto mining sector has taken a complete hit in 2022, with plummeting bitcoin prices and soaring energy costs shaking up a deadly macro cocktail.
Bitcoin mining may seem like an esoteric industry, but its revenue model is simple: generate revenue by minting new bitcoins by expending a ton of energy to power the massive banks of computers that perform the mining functions.
It should therefore come as no surprise that the sector is being hit by soaring energy costs and falling bitcoin prices.
Is there a way for Argo and its competitors to get by? Sure! But it all depends on whether the peak of energy inflation is behind us and whether the bottom has finally been reached in the bitcoin market.
Argo, while not the biggest faller of the week, that badge fell on Trackwise Designs, which saw its shares plunge 81% on a heavily reduced fundraising plan that would see the group listed on the AIM is raising an initial amount of £5.15m.
In a statement, Philip Johnston, Managing Director of Trackwise, said it was “deeply regretful that we have found ourselves having to come to market on these terms”.
Advertising platform Dianomi, was another slider, down 12% in response to the group’s latest trade release, while its counterpart Mirriad fell more than a quarter on Wednesday after the group’s latest trade release.
Revenue for the year is expected to be between £1.52m and £1.75m, Mirriad said, slightly below market expectations, pending a number of late deals that could be won and delivered before the end of the year.
AIM’s top 100 shares were also down on the week, losing around 1.1% to 3,926, although that was slightly better than Footsie, which fell 1.2%.
Some companies saw cheers ahead of Christmas.
In the mining segment, Oriole Resources jumped 35%, catalyzed by news that the Africa-focused exploration company had provided a first-ever JORC mineral resource estimate for its gold prospect at Bibemi in Cameroon.
JORC is the Australian mining industry standard for reporting exploration results.
In a statement, Managing Director Tim Livesey said: “We are very pleased to have delivered an initial JORC mineral resource estimate of significant size in a cost-effective manner and on such short notice, despite the impacts of the covid pandemic”.
“This was the first drilling ever at Bibemi and it clearly demonstrates the huge opportunity that exists in this underexplored region.”
Oriole’s rally took his market value to £4.4million.
Construction safety firm Billington Holdings, which climbed 30% after forecasting full-year pre-tax profits to be significantly above previous expectations, also rose.
The company said trading has continued to improve since it released its half-year results in September, when it highlighted a strong order backlog at improving margin levels and a large pipeline of sales. opportunities.
Invinity Energy Systems meanwhile jumped 17% after announcing the sale of a 1.5 MWh flow battery system to Hyosung Heavy Industries.
The AIM-listed global utility-grade battery maker said the sale was an important next step in forming its global partnership with Hyosung, the first details of which were announced in April.