- Lawsuit was launched against Argo and many of its top executives and board members.
- The investors contend that the miner’s financial prospects were exaggerated.
In a class action lawsuit filed, investors in crypto miner Argo Blockchain claimed the company misled them during the IPO by making false representations and withholding key facts.
On January 26, a lawsuit was filed against Argo and many of its top executives and board members. It asserts the company concealed its vulnerability to cash flow issues, high energy bills, and infrastructure challenges.
The lawsuit read:
“The Offering Documents were negligently prepared and, as a result, contained untrue statements of material fact or omitted to state other facts necessary to make the statements made not misleading.”
Shares Price Plummeted
The investors contend that this means the miner’s financial prospects were exaggerated since the firm is “less sustainable” than they were led to expect.
The complaint mentioned:
“Had [the investors] known the truth, they would not have purchased or otherwise acquired said securities, or would not have purchased or otherwise acquired them at the inflated prices that were paid.”
On September 23, 2021, Argo disclosed the data in filings with the United States Securities and Exchange Commission (SEC) for its first public offering (IPO).
On the same day, at an offering price of $15 per share, 7.5 million shares were sold to the public, bringing in $105 million before fees and costs. Shares of the mining company have taken a pounding since then, dropping to a low of $0.36 and now trading at $1.96.
In order to be listed on the Nasdaq Stock Market, a business must have a closing bid price of at least $1 for 10 consecutive trading days, a requirement that Argo fulfilled as recently as January 23.
