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Gone to a bank and got a loan instead - used the BTC mined as guarantee of loan.
Once Texas facility was built & new rigs up and running, THEN LIST on the Nasdaq!
This whole execution of the IPO was a total balls-up & has knocked the wind out of sails. Long term we all know Argo is a winner.
Just a rant / vent thats all
How on earth did they not call you and save millions on other less qualified organisations who were obviously clueless. Or were they?
....err they've done the whole loan using BTC as collateral bit already with Galaxy. They're using part of the raise to pay some of it back.
Really!!?? @Hereshopin
Are you a qualified banker or something??
50% discount rate lol
They did raise loan on the BTC hodl from Galaxy, twice, which will be repaid in a month from the IPO capital raised. This will leave the company debt free, which is a pretty enviable position for an 'early growth' company with kind of the profit margin ARB has.
ARB are only paying part of the Galaxy Loan from the IPO proceeds with the rest re-packaged and used to buy machines (and presumably further loans will be at least part of the approach used to fund the sort of machine numbers that Texas can accommodate). No alarms since, as previously stated by ARB, raises, loans and selling BTC are the three main options they plan to use to fund growth - and would be strange if they ruled any of them out.
"The Company expects to repay £18 million ($25 million) of the principal of this loan with the proceeds of this offering and convert up to £14.5 million ($20 million) of the principal of this loan into mining machine financing upon receipt of machines and satisfaction of other conditions, with the repayment date for such financing extended beyond 29 October 2021 to a date to be agreed."
10 years ago btc wouldn’t have been a tangible asset. Now it is and a fast appreciating one as well!
In todays world theres awash of cheap low interest rates out there for business’s to raise capital.
All the banks would be fighting hand over foot for Argo to use them as their creditor.
Instead Argo decides to get shafted (well shareholders) with this IPO.
Effectively we’ve given 50% away to date on todays SP to give the luxury of being on the ‘NASDAQ’ whoop whoop
To repeat - they've already done this and I think used up most of their HODL as collateral in doing so. It only raised $45m (and from memory over 700 BTC was needed as collateral for the first $20m). They can't use the same asset as collateral twice - obviously.
They did it with a specialist providers as I presume most banks would see BTC as too volatile an asset to use as collateral (not without the heavy discounts mentioned before).
I’m being picky here but crypto is an intangible asset :)
I don’t think any mainstream bank would lend to a small cap in the crypto space. The risk/compliance department would have a field day. Which is why we’ve had to go to specialist lenders in the space like Galaxy and pay what was it, 10-12% interest.
Plus what we don’t know at the minute is how much btc was required to commit the Galaxy loan collateral. Everything I have read suggest crypto borrowers have to massively over collateralise.
Blubay,
What % of profit do you have? Its at barely 10 percent at agh prices this year too …….
Arb barely made profit this year it’s on track for 12 million usd profit before ebitda. That’s not colossal! I got wrapped up in the profit margin in the mining but not much left after the other costs. We have had record prices this year which has obviously helped.
Wolf - we do know how much was used as collateral for the first loan as this was described in the interim accounts and was initially 795.
The whole point of crypto is to beat banks! We don't need them, they're scared of bitcoin. When banks are dead/in a different format we will look back at how things were and laugh. haha
Thanks Hexam - do you know when it started and how much the loan was? Sorry being lazy long day!
Hi Wolf - this should hopefully have all the info you're looking for:
"On 29 June 2021 the Group entered into a loan agreement with Galaxy Digital LP for a facility of US$20 million. The proceeds of the loan will be used, in conjunction with funds raised previously, to continue the build-out the West Texas data centre. The short-term loan is a Bitcoin collateralised loan against 795 Bitcoin initially with a further 86 Bitcoin transferred after the period end. It has a 6-month term and attracts an interest rate of 12.5% per annum."
"On 9 September 2021, the Company entered into an additional $25 million term loan agreement with Galaxy Digital
LP (New Galaxy Term Loan) to finance the continued build out of its new cryptocurrency mining facility in Texas
and other general corporate operations. The outstanding principal of the Galaxy Term Loan, in the amount of $20
million, was subsumed into the New Galaxy Term Loan, resulting in total borrowings of $45 million under the New
Galaxy Term Loan. The New Galaxy Term Loan will mature on 29 October 2021 and the borrowing fee on the loan
is 4.5% per annum."
Thanks Hexan for the RNS info in-put so the loss of 86 bitcoin - at todays price $42k thats not bad for both parties involved imo.
Argos objective is to scale up production and i feel there were better ways to go about this than Argo chose to do.
i feel its a massive own goal & gives the impression to me, Pete undervalued Argo not vice versa.
The people who wrote the cheque for that loan knew this was like ‘taking candy from a baby’.
Really looking forward to the next argo video posting.
@Lambinator - the 86 BTC is a red herring as the original loan was subsumed into the new loan and on seemingly much better terms (just 4.5% p.a. interest - perhaps due to BTCs rise in the meantime).
Personally I think the IPO was the right way to raise funds, especially as it gives better exposure to US investors too, but the size of the discount was very disappointing to say the least. We don't know the whole story though and what is done is done. Key thing now is that we get some news soon on machines as this will have far more impact on finances than any shortfall from an underpriced IPO - if indeed it was underpriced.
Lambinator
“ Thanks Hexan for the RNS info in-put so the loss of 86 bitcoin - at todays price $42k thats not bad for both parties involved imo.”
Ok.
“Argos objective is to scale up production and i feel there were better ways to go about this than Argo chose to do.”
Really? And your expertise is?
“i feel its a massive own goal & gives the impression to me, Pete undervalued Argo not vice versa.”
Ok. Whatever that means. It means something, right?
“The people who wrote the cheque for that loan knew this was like ‘taking candy from a baby’.”
Jesus, I wish Peter Wall were as clever as you are. Remind me. You were CEO of which billion dollar company?
Really looking forward to the next argo video posting.
Lambinator, while we are talking about delusions of adequacy, what does “should of” mean?
I think you should have posted “should have” which actually means something in the English language.
You are welcome.
@Hexam
"Personally I think the IPO was the right way to raise funds, especially as it gives better exposure to US investors too, but the size of the discount was very disappointing to say the least. We don't know the whole story though and what is done is done. Key thing now is that we get some news soon on machines as this will have far more impact on finances than any shortfall from an underpriced IPO - if indeed it was underpriced."
That's pretty much my take on it too, it's way better fir the company to raise via shares rather than debt or btc selling. Our shareprice can recover through sentiment whereas btc selling and loans are permenant.
My original share price expectation was 1.10 but I talk myself up from that through greed and hope.
In hindsight the 130 - 140 trading range was where it was going to be pitched at and 20% more shares mean 20% lower price.
It's not nice and I wish I would if trusted my thoughts on it but it is what it is now.
My calcs with the machines installed that we are expecting and getting to 1.6Eh puts the price at £2.40
That's without texas.
The market will wake up to it soon enough
@kev
Looks like your punchy sarcasm is in full flow, don't be a meany.
the_Chuz
My best friend died yesterday. Bite me.
Wow thanks for that insightful reply - so you write back to add another post to that tally of yours?
Whats the badge next to the name an accomplishment for?…… hhhmmmm
Put it this way KV-jelly i wouldn’t have undervalued Argo at that IPO price!
I guess you must be the guy who’s doing backflips & somersaults praising Pete’s brilliant handling of this farce?
SHOULD 'HAVE'
https://www.lawlessenglish.com/english-mistakes/should-have-vs-should-of/
@kev
Ahhh man, vent as you see fit I reckon, if it helps at all (it doesn't but some anonymous poster on a BB isn't going to convince you otherwise).
1.5 million dollar buy 90000k at 16.66 just gone through thats not punt money gla