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Argo Blockchain, a crypto miner whose shares trade on the London Stock Exchange (ARB) and Nasdaq (ARBK), is facing a class action lawsuit over alleged misleading statements made during the initial public offering (IPO) of its American Depository Shares (ADS) in 2021.
The London-based company made statements that were untrue or incomplete, failing “to state other facts necessary to ensure that the statements made are not misleading,” according to a January 26 filing with the US District Court for the Eastern District. from New York.
Argo is accused of failing to declare that it suffered from significant capital, electricity and network constraints. These constraints have hampered the company’s ability to mine bitcoin and operate its Helios facility in Texas.
“Argos’ business was less sustainable than defendants had led investors to believe; therefore, Argos’ business and financial prospects were overstated,” according to the filing.
The mining company offered 7.5 million ADSs, each representing 10 common shares, on the Nasdaq global market in September 2021. However, 2022 has not been kind to Argo, nor to its peers in the mining industry. bitcoin. Companies have been caught between falling crypto valuations and rising electricity costs. The pressures resulted in the bankruptcy of one of the biggest miners in the industry, Core Scientific.
Argo narrowly avoided the same fate by selling the Helios facility to Mike Novogratz’s crypto-focused financial services firm, Galaxy Digital, for $65 million and a $35 million loan.
The sale helped boost shares of Argo, which fell more than 90% last year. The London-based stock more than doubled in January and US stocks, which were in danger of being suspended, also rallied.
LSE-listed Argo shares were down more than 3% at 15.94 pence at midday London. At the time of writing, ARBK shares on the Nasdaq are down about 4% at $1.95 in premarket trading.
Argo had not responded to CoinDesk’s request for comment at press time.
The story continues
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