This morning, Long Island Iced Tea, a New York-based beverage maker, announced it was changing its name to Long Blockchain Corp. The company’s relation to cryptocurrency is dubious — it says it will “leverage the benefits of blockchain technology” — but it was quickly rewarded with a 200 percent jump in stock price at the opening of trading.
Long Island Iced Tea isn’t the first or even the strangest company to try cashing in on the bitcoin craze. As bitcoin’s value skyrocketed past $15,000 earlier this month, several companies have rewritten their name or mission statement to reference blockchain technology or cryptocurrency. Just a mention of bitcoin appears enough to woo investors and get media attention (including, now, this story).
Bloomberg noted several of the stranger rebranding efforts: sports bras, juice, and e-cigarette companies that appear to have had very little to do with bitcoin previously.
Formerly known as SkyPeople Fruit Juice, the Hong Kong-based company renamed itself Future FinTech Group Inc. Despite the new label, the company still makes packaged food and, in its November presentation to investors, made mention of its plans to expand kiwi and orange plantations.
Another company, The Crypto Company, actually deals in cryptocurrency but went public by acquiring a sports bra company. The Crypto Company had its stock suspended by the SEC on Tuesday, citing concerns about accuracy and “potentially manipulative transactions.” The public sports bra company it acquired had declared quite ambitiously on its site that its bras were going to have pockets for holding money, chapstick, and ID, a tiny phone charger, and mace.
Then in the vaping business, the California-based Vapetek Inc. has decided to rename itself Nodechain Inc. and says it will explore Bitcoin, Ethereum, and other cryptocurrencies. Nodechain says it has many GPU mining rigs it bought from US suppliers and estimates that it will be able to pull in around $500 in ethereum or in bitcoin per rig each day. The publicly traded company also changed its website domain from Vapetek.com to Nodecha.in.
In one of the more extreme cases, a Hong Kong group called Ping Shan Tea Group Limited, which, as its name suggested, makes tea, has redefined itself as Blockchain Group Co Ltd. Its website now incongruously shows a sleek blockchain logo alongside large stretches of a tea plantation.
Like Ping Shan, now Blockchain Group, Long Blockchain Corp. is going to continue making tea despite its new name. It’s all reminiscent of yesteryear’s dot com bubble when random companies would add dot com to their names.
Left Image: Photo by Chesnot/Getty Images. Right Image: iStock / Getty Images Plus
As anyone who's been on the internet this year knows, the price of Bitcoin has exploded. The idea of making millions for doing next to nothing makes Americans lose their minds, so it's not surprising that people who had never heard of cryptocurrency a few years (or even months or weeks) ago are now more than willing to invest in it. At least some experts say the fact that consumers are reportedly taking out credit card debt and mortgages to do so suggests a speculative bubble is looming. After all, if you ask any given Bitcoin proponent how blockchain technology works, there's a good chance you'll be met with silence or rage.
But the combination of hype and a general lack of knowledge about what's being invested in seems to have some investors latching onto anything with the words 'Bitcoin' or 'blockchain' in it. Or at least that's the only plausible explanation for why a beverage company saw its shares rise by almost 300 percent after a name change from Long Island Iced Tea Corp. to Long Blockchain Corp.
According to Bloomberg, it's just one of several companies that have rebranded to capitalize on the crypto craze. Not that such a pivot necessarily means a whole lot in particular for Long Blockchain, which appears to remain a company that literally sells lemonade—albeit one that was struggling before it got in on the gold rush.
"As with many of the recently christened crypto companies—a list that includes former makers of juice, sports bras and sofas—Long Blockchain so far has little to show for its aspirations," Bloomberg reported. "It has no agreements with any blockchain firms, and says 'there is no assurance that a definitive agreement with these, or any other entity, will be entered into or ultimately consummated.'"
The main thing this company has done differently at this stage, so far as the outside world can tell, is purchase longblockchain.com. Its original website remains intact and promotes their signature product of Long Island Tea.
Speaking of misleading names, this stuff is apparently non-alcoholic.
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Want to increase company value on the open market? Just change your name to something blockchain. At least, that worked for the Long Island Iced Tea Corp after changing its name to Long Blockchain Corp.
In what is the most 2017 thing ever, company shares soared by as much as 500 percent in pre-market trading this morning after the company announced the name change, settling back to about a 275 percent gain.
Up until this morning, Long Blockchain was a little-known company making non-alcoholic lemonades and ice teas. As of Wednesday, the company had a market value of just $23.8 million, but at one point in pre-market trading had 9.76 million outstanding shares, giving the company a market value of close to $138 million. That’s small by Wall Street standards, but significant considering the only factor seemed to be the name change.
Much of the growth is owed to bitcoin mania. Not a day goes by, it seems, we don’t hear of some new hike in the cryptocurrency’s price.
Bitcoin-related stocks like NVIDIA and AMD are capitalizing on the craze, but so are little-known companies like Riot Blockchain, which was a struggling biotech company that had gone through several name changes (most recently Bioptix) but saw a smaller, yet phenomenal rise in share price after switching focus to crypto and adding “blockchain” to the name.
Long Blockchain plans to follow in a similar path. It still plans to sell non-alcoholic ice teas and lemonades as a subsidiary but now says it will be mainly seeking to partner or invest with companies involved in blockchain technology and would like NASDAQ to change the company’s trading symbol to reflect the new effort.
Though the company says it doesn’t have any agreements in place, the company has switched its domain to http://www.longblockchain.com and the new site says Long Blockchain is in the “preliminary stages of evaluating specific opportunities.”
Long Blockchain is just the latest in little-known micro cap stocks capitalizing on blockchain to spin heads on the trading floor, leaving some investors worried about possible fraud and unmerited valuations.
The U.S. Securities and Exchange Commission has been clamping down on other small stock companies that’ve profited from crypto name changes. For instance, the SEC suspended trading in shares of The Crypto Co., which saw a surge in stock price by as much as 17,000 percent in the last three months after announcing plans for a roll out of a crypto trading floor. The SEC suspended the trading in the company until January, citing “concerns regarding the accuracy and adequacy of information.”
It’s unclear what actions, if any, the SEC would take for Long Blockchain, however. The company could not be reached at this time and so far we have not heard back from the SEC for comment.
One thing is sure, though, this type of activity reflects a very weird and wild crypto ride this year.
Featured Image: bhofack2/Getty Images
