Argo Blockchain (LSE: ARB) shares were up almost 14% on Friday. This stock is volatile so I’m not surprised by the large price movement. Given how cryptocurrency in general can be erratic, I’d expect the same with a miner of the digital assets.
But the stock was up for a specific reason at the end of last week. I’ll discuss this shortly. Even with the rise, I think Argo Blockchain shares are still worth buying. I’m a long-term investor and was bullish on the company at the beginning of the year. So far in 2021, the stock is up nearly 190% and has increased by over 1,870% in the last 12 months.
So despite the volatility, the share price has increased by a stellar amount. I reckon this can continue. Here’s why.
The stock jumped on Friday because the company announced a NASDAQ listing its shares under the ticker ARB”. It will keep its London listing as well. So what does this mean?
Well, having its stock listed on the US market means higher exposure for Argo Blockchain from an investment point of view. This means that the company may find it easier to raise capital for it to grow. Also, the US equity markets are among the world’s most liquid, which means that liquidity for Argo Blockchain shares should also improve.
This news came after the company reported strong half-year results earlier this month. Sales increased by 180% to £31.1m. Its mining margin jumped from 39% last year to 81% in the six-month period. Pre-tax profits also rose to £10.7m from £0.5m.
The firm remains focused on “smart growth”, which means expanding its mining capacity. The more cryptocurrency it can mine, the higher its revenue and profits are likely to be.
While I’m bullish on Argo Blockchain shares, the stock does come with risks. Since it’s a miner of cryptocurrency, the share price is going to be linked to the performance of the most popular one, Bitcoin.
Also, the company was subject to an attack by Boatman Capital. My fellow Fool, Edward Sheldon covered this news in detail. Boatman accused the cryptocurrency miner of misleading investors and its report mostly focuses on the purchase of its land in Texas. There’s a risk such an attack could happen again.
Should I buy?
Judging by the share price surge, most investors view the additional listing as a positive thing. A lot has been going on for Argo Blockchain. But as I said, the stock is up by a stellar amount this year, despite the volatility.
I’d still buy, but it’s not for the fainthearted. I’d only invest what I could afford to lose. In my view, it’s a speculative purchase. The company is ambitious in its goals and is making a name for itself in the cryptocurrency space.
This has ruffled a few feathers along the way and I expect it to do so going forward. After all, it’s operating in a relatively new industry. But as a long-term investor, I’m bullish on Argo Blockchain shares.
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The content in this article is provided for information purposes only. It is not intended to be, neither does it constitute, any form of investment advice. Bitcoin and other cryptocurrencies are highly speculative and volatile assets, which carry several risks, including the total loss of any monies invested. Readers are responsible for carrying out their own due diligence and for obtaining professional advice before making any investment decisions.
Nadia Yaqub has no position in any of the shares and cryptocurrencies mentioned. The Motley Fool UK owns shares of and has recommended Bitcoin. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.