On Friday, Argo Blockchain (NASDAQ: ARBK) was downgraded from Buy to Neutral by H.C. Wainwright, citing challenges in the cryptocurrency mining sector. The company's full-year figures for 2023 were released, showing a decrease in revenue to $50.6 million, a 14% drop from the $58.6 million in 2022. This decline was attributed to increased competition for bitcoin block rewards due to a rise in network hash rate the previous year.
Argo Blockchain's financial position at the end of the March quarter was highlighted as a key concern, especially with the improvement in mining economics from the surge in bitcoin price and the recent halving event. Despite these factors, Argo's debt remains a significant burden, standing at $54.0 million in March, down from $66.2 million at the end of the previous year. The company's cash position was recorded at $12.4 million, with an additional holding of 26 bitcoin and equivalents valued at $1.7 million.
The sale of Argo's Mirabel facility for $6.1 million helped to reduce debt with Galaxy Digital and suggested a valuation of approximately $18.3 million for its fully-owned Baie Comeau facility. Argo hosts the majority of its hash rate at the Helios facility, which is now owned and operated by Galaxy Digital.
Revenue for the March quarter was reported at around $17.0 million, a slight increase from the $16.2 million in the December quarter, demonstrating the impact of bitcoin prices on mining revenue. This increase occurred despite the expansion of network hash rate over the past six months. With the downgrade, H.C. Wainwright has relinquished its previously bullish stance on Argo Blockchain.
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