If you’ve been paying careful versus cursory attention to blockchain news, you know that Long Island Iced Tea is more than just a boozy drink. It’s also a company trying to get rich off the buzz currently surrounding cryptocurrency and blockchain. The New Jersey based company has inspired widespread skepticism.
The Nasdaq stock exchange publicly announced it would delist Long Blockchain, Inc. (aka Long Island Ice Tea) stock because the company’s market capitalization is just too low.
Long Blockchain changed its name from Long Island Iced Tea last December and announced it would diversify from beverages into cryptocurrency.
The company was forced to disclose the notice in an SEC filing last Thursday and said it plans to appeal the decision by February 22. In order to remain listed for the long run, the company’s value would have to remain above $35 million for at least 10 days.
The company has been well below the required value almost every day since January 26th. Long Blockchain’s total market cap did nearly double to almost $67.4 million, immediately after its pivot announcement last fall. However, that was just before the historic 2017 bull run for cryptocurrency came to shocking halt and then plummeted. The company’s stock has been sluggish ever since.
Worse still, Long Blockchain’s pivot has been really rocky so far.
Long Blockchain announced in early January it would spend as much as $4.2 million to buy cryptocurrency mining servers which would be operated by a third party.
Mining is a high-risk and relatively unexciting proposition compared to the development of a useful cryptocurrency service; so, it naturally follows that merely a few days later, Long Blockchain abandoned plans to sell stock to finance that purchase of mining equipment. A few weeks later, the company abandoned all traces of the mining proposal entirely.
Coindesk reports a possible explanation for the seemingly rushed pivot, but, it only makes Long Blockchain Inc. seem even sketchier. As it turns out, Long Island Iced Tea had already once been threatened with delisting back in October 2017. Adding “blockchain” to its name seems to have bought the company some breathing room by manipulating the stock somewhat.
Though a relatively small venture, Long Blockchain’s story is symbolic of a broader trend in which struggling companies are trying desperately to get on the blockchain bandwagon.
For example, Kodak and Atari have also tried to milk cryptocurrency buzz in recent months, but, have been met with skepticism by experts and laymen alike. One analyst roasted Kodak’s plan as “nonsensical” and shared pictures of a shack tagged as the headquarters of a project partner.
Long Blockchain’s path ahead now appears to rely on a merger with an obscure U.K. based blockchain startup, Stater Blockchain Limited, specializing in building financial services.
It’s unclear, though, just what Long Blockchain has to contribute especially considering it will likely soon lose its Nasdaq listing. Had the company avoided delisting, they might have been able to get Stater a stock market presence through a reverse takeover. That’s simply not possible if they are delisted.
Long Blockchain claimed back in December that it would continue making bottled tea and rely on its product if Bitcoin plans didn’t pan out. But, despite being named after a legendarily boozy drink, the Long Island Iced Tea product line doesn’t include any alcohol whatsoever. Um, so it’s just iced tea?
(For another beverage-related news update, read Next cup of coffee’s on Wall Street: How Bitcoin Futures changes everything.)