Investors in Argo Blockchain, a cryptocurrency mining company, have filed a class action lawsuit, alleging that miners made false statements and omitted important information in their 2021 initial public offering (IPO).
A new lawsuit, filed on January 26, targets Argo and several of its executives and directors. The company claims it failed to disclose the extent to which it was affected by capital constraints, power costs and network issues.
“The offering documents were negligently prepared and as a result contain false statements of material facts or omit other statements of fact necessary to avoid misleading did,” the lawsuit said.
As a result, investors claimed the business was “less sustainable” than they were led to believe, which led to an overestimation of the miners’ financial prospects. increase.
“had [the investors] Had they known the truth, they would not have bought or otherwise acquired that security, or at the inflated price paid, or otherwise. ”
Argo made the information public on September 23, 2021, when the company filed documents related to its IPO with the U.S. Securities and Exchange Commission (SEC).
7.5 million shares were issued to the public on the same day at an offering price of $15, resulting in pre-expenses earnings of $105 million.
Miner’s stock has since plummeted, dropping to $0.36 before now trading at $1.96 per share.
Argo did not immediately respond to a request for comment from Cointelegraph.
Related: Bitcoin hashrate hits new milestone as miners stay at lowest level in a year
The latest lawsuit comes just days after Argo regained compliance with Nasdaq’s listing rules on January 23.
Argo has had to make some tough decisions to navigate the ongoing bear market and the tough times facing cryptocurrency miners. The company announced on December 28 that it will sell its flagship mining facility, Helios, to digital asset investment manager Galaxy Digital for $65 million.
2022 has been a turbulent year for crypto miners in general. Soaring electricity prices, falling cryptocurrency prices, and increasing mining difficulty all weighed on earnings.