Short seller takes aim at Bitcoin miner

A LONDON-LISTED Bitcoin miner linked with potential investment by Elon Musk is facing accusations that it bought land in Texas for up to 100 times its actual value.

Low-profile research outfit Boatman Capital claims that Argo Blockchain’s deal to spend up to $17.5m (£12.6m) on land that is allegedly worth just $168,000 raises “serious governance questions about why this deal was done and who benefited”.

The company said the claims made by Boatman were “unfounded” and its boss, Peter Wall, insisted that the acquisition of the Texas land was a “very solid deal”.

Argo Blockchain, which uses powerful computers to perform complex calculations to “mine” Bitcoin, has rode the recent boom in cryptocurrency. Its shares have increased from 6p to almost 130p over the past year, leaving it worth £500m. Shares spiked 17pc last month on unsubstantiated reports that Mr Musk’s Tesla had bought a stake in Argo Blockchain.

The criticism is the latest levelled by Boatman, which made headlines nearly three years ago with its attack on Babcock, Britain’s secondbiggest contractor.

In June, the short seller

launched a stinging assault on Angloamerican’s spin-off of a group of South African coal mines.

In February, Argo Blockchain announced it had agreed to buy 320 acres of land for $5m in shares initially, rising to $17.5m once other milestones were met.

The company later clarified that the size of the land in question was actually 160 acres. The deal was funded from the proceeds of £49m raised from shareholders in the first three months of the year.

Boatman obtained a formal valuation of the land by a certified real estate appraiser in Texas, which concluded that the land was worth $168,000.

Mr Wall, the chief executive and interim chairman, defended the price paid for the Texas land. “We feel it was a good deal because it wasn’t just a land acquisition, it was a project acquisition,” he said.

“It was a shovel-ready project that allowed us to skip 12 to 18 months of work that Argo would have had to do, had we not acquired this project.”

The Boatman attack risked taking the shine off bumper results posted by Argo Blockchain for the first six months of the year.

Pre-tax profit rose from £523,074 to £10.7m on £31.1m of revenue.