Long Island Iced Tea Corp (NASDAQ:LTEA) saw its stocks rise sharply after the company decided to hop aboard the cryptocraze train; the tea maker rebranded its name to cash in on the current investor frenzy surrounding bitcoin and other cryptocurrencies, opting to call itself “Long Blockchain Corp.” The move proved an instant, if not necessarily permanent success; after the tea maker adopted Blockchain into its name to pique investor’s interest, its share prices rose by a dizzying 289 percent.
Investors are thirsty for cryptocurrencies
After Long Island Iced Tea Corp. decided to shift its focus to concentrate its efforts on the ongoing blockchain frenzy, many investors were left wondering if the company was playing some daring joke. Having already reserved www.longblockchain.com, however, and having announced that it intends to change its NASDAQ symbol to better fit its new focus, some investors are musing that the iced tea company’s savvy branding move could lead to a permanent bump in its share prices.
Of course, the pivot to cash in on the market’s ongoing cryptocraze doesn’t mean Long Island will be abandoning its staple product; its bottled beverages will still be sold through a wholly-owned subsidiary, aiming to cash in on the current consumer craze surrounding healthier foods and beverages. In the past, Long Island has attracted a loyal customer base by marketing its bottled tea products as a significantly healthier alternative to previous staple-drinks like sodas and energy drinks, winning the support of many investors who see the value of company’s catering to green-minded consumers.
The ambitious move on the company’s part certainly added some wind to its sails; Long Island’s share prices soared to a high of $9.49 before settling back to close at $6.91 on December 21st alone. The astonishing 289 percent increase shows just how seriously investors everywhere are taking blockchain and cryptocurrency-focused companies, which have been drawing headlines amidst Bitcoin’s rapidly fluctuating valuation.
The newly-coined Long Blockchain has declared its intentions to partner with companies and savvy investors interested in pioneering blockchain, a decentralized ledger that’s helped cryptocurrencies like Bitcoin rise to the forefront of the market’s attention span. The move may not interest everyone, however; investors who can remember the dot-com boom and bubble may see Long Blockchain’s inventive rebranding as a death sentence in the long run, as countless organizations which previously had no ties to blockchain or other crypto-technologies seem to be throwing their hat in the ring for the sake of instant profits.
A passing fad?
Still, to write bitcoin and other cryptocurrencies which need technologies like blockchain to exist off wholeheartedly wouldn’t be so wise, either; investors have been saying that the digital currency, which many are decrying as a mere speculative asset, would plummet for years, but the price of Bitcoin has rallied by some 1,500 percent in 2017 alone. Long Blockchain’s clever rebranding could legitimately stand to be a new launching point for a company eager to cash in on the major interest surrounding cryptocurrencies currently, and if the company plays its cards right, the massive surge in its share prices it enjoyed last Thursday could stand to become a new normal for it.
Of course, savvy investors will look beyond the media headlines to closely scrutinize the performance of Long Island Iced Tea Corp. before it became Long Blockchain. The bottled-tea maker posted serious losses recently, for instance; the company has yet to earn a profit since it went public in 2016, despite a heavy ad campaign for Superbowl 2018, and it has yet to announce any serious opportunities revolving around blockchain that could change the minds of investors.
The company’s net losses of $3.9 million on sales of $1.6 million in the three months ended Sept. 30th will likely give many investors pause before they opt to buy into the company’s ambitious plans. Whether the market is undergoing a fierce cryptocraze or not won’t matter to those financial backers looking for a profitable company, and Long Blockchain’s clever rebranding won’t do anything to help its current business woes. A ready-to-drink beverage subsidiary wholly-owned by Long Blockchain Corp. will end up being the lifeforce behind the so-called blockchain company’s future, and if it doesn’t have luck wooing in more customers soon, the rebranded company won’t last long.
As one of Cornell University’s top computer science professors told Newsday, a certain type of craziness always surrounds emerging tech trends like the recent blockchain/cryptocurrency fad. Whether digital currencies like Bitcoin will plunge, taking Long Blockchain’s future with it, remains to be seen, but the company’s gamble that blockchain tech will take off, raising its share prices along the way, is an incredibly risky one. Wise investors will understand that Long Blockchain’s rebranding doesn’t help solve its business dilemmas, and that the company’s future is now entirely based on the welfare of an increasingly shaky and unregulated crypto-market.