- Long Island Iced Tea quadrupled its stock price — and avoided being kicked off Nasdaq’s stock exchange — in a single day by changing its name to Long Blockchain.
- Without any actual cryptocurrency assets, the company is now back below a $35 million market cap, meaning it could get another warning.
- The company is currently attempting to merge with a British brokerage.
The Long Island Iced Tea Company needed a boost and it needed one quick.
In October, the company was warned by Nasdaq that unless it could maintain its market value above $35 million for at least 10 consecutive business days in the next six months, the company could be de-listed by the exchange.
Its savior would come in the form of cryptocurrency. Unfortunately for the company, however, it appears the relief may be short lived.
In December, after Long Island Brand Beverages announced its new name, Long Blockchain, and new strategic focus on the technology underpinning cryptocurrencies like bitcoin, its stock more than quadrupled from $2.15 to $9.49. The company’s market cap was now well above the $35 million mark, at $67 million, and receiving mountains of mainstream press coverage it otherwise could only have dreamed of.
But on Wall Street, onlookers weren’t convinced a small beverage bottler from New York City’s suburbs could just simply pivot to blockchain. “I read the Long Island Iced Tea prospectus and then almost fell out of my chair when you reported they were becoming a Blockchain company,” one industry insider told Business Insider.
Long Blockchain’s quest into cryptocurrency continued through the new year. In January, the company said it would sell $8.4 million worth of shares to finance the purchase of 1,000 S9 Antminer bitcoin mining machines, before balking on that plan less than a week later.
Now, less than a month later, the company’s stock price has fallen to $3.16, a level not seen since shortly after its pivot to blockchain. The decline has dragged Long Blockchain’s market cap down to $32.29 million, according to Bloomberg data, well below the $35 million level that previously triggered Nasdaq’s warning.
Neither Nasdaq nor Long Blockchain responded to requests for comment, and it is not clear if the decline will lead to yet another warning from the exchange operator. The exchange’s website lists $35 million in market value of listed securities as one of three possible standards for continued listings.
Still, Long Blockchain appears to be continuing its bet on the distributed ledger technology. The company said on January 16 that it had entered into a “letter-of-intent” to be acquired by British firm Stater Blockchain, a “technology company focused on developing and deploying globally scalable blockchain technology solutions in the financial market,” according to its website.
If the buyout is approved, Stater Blockchain would become a wholly-owned subsidiary of Long Blockchain. This means Long Blockchain would finally have tangible blockchain assets, including Stater’s in-house currency futures brokerage. Currently, Long Blockchain owns no blockchain assets and has not clarified how or when it will purchase the bitcoin mining rigs it set out to earlier this month.
An agreement, if reached, is likely to be announced in the second quarter of 2018, the companies said.
“Stater has been making investments to build its cryptocurrency platform and blockchain solutions, and we look forward to combining our efforts in this transformational partnership,” Long Blockchain CEO Philip Thomas said in a press release.
“Our ultimate goal is to build a portfolio of investments that touch multiple points in the blockchain ecosystem and this transaction would be an important step in that direction.”