Long Blockchain threatened with NASDAQ Delisting
The Nasdaq stock exchange has informed New Jersey-based Long Blockchain, Inc. that it might delist the stock because the company’s market capitalization was too low. Long Blockchain was formerly called Long Island Iced Tea, but changed its name last December and announced it would diversify from drinks into cryptocurrency.
The business revealed the notice in an SEC filing past Thursday, and said it might appeal the decision from February 22nd. To stay recorded long term, the value of the company would need to stay above $ 35 million to 10 or more days. It has been below that worth virtually every day since January 26th.
Long Blockchain’s total market cap almost doubled, to up to $67.4 million, immediately after its pivot announcement. But that announcement came just before the 2017 bull market to get cryptocurrency came to an end, and the company’s stock has shrunk since.
Worse, Long Blockchain’s pivot has appeared rocky so much–and that’s putting it gently. The business announced in early January that it would spend up to $4.2 million to buy cryptocurrency mining servers to be managed by a third party. Mining is a high-risk and relatively unexciting proposition compared to, say, building a useful cryptocurrency assistance, and just a couple of days after, Long Blockchain abandoned plans to sell stock to fund the purchase. A couple of weeks after it abandoned the mining proposal .
Coindesk reports a possible explanation for the seemingly rushed pivot: Long Island Iced Tea had already been threatened with delisting once, in October of 2017. Adding ‘blockchain’ seems to have purchased some breathing space to it by juicing its stock.
Though small, Long Blockchain is emblematic of a wider trend. Other struggling firms, such as Kodak and Atari, also have tried to mine some mojo out of cryptocurrency in recent months, but have been met with skepticism by specialists. In Kodak’s case, 1 analyst roasted the company’s strategy as “nonsensical,” and shared pictures of a ramshackle construction recorded as the headquarters of a project associate.
Long Blockchain’s forward route now appears to hinge to a merger with an vague U.K. blockchain startup called Stater Blockchain Limited, which is focused on building financial services. It’s unclear, however, what Long Blockchain would bring to the table, particularly if it loses its Nasdaq listing, which may have been helpful for Stater a stock market presence by means of a reverse takeover.
There is one other possibility. Long Blockchain said back in December that it might continue producing tea since it diversified into Bitcoin, also when its own Bitcoin plans fizzle, it might fall back on that specialty.