Long Blockchain Gets Axed from the NASDAQ

Struggles continue for companies that have added ‘blockchain’ to their titles in thinly veiled efforts to attract investor interest. 

On Tuesday (April 10), Long Blockchain (NASDAQ:LBCC) officially received notice from the NASDAQ that the company’s shares would cease trading on the index effective on Thursday (April 12).

The company had initially received notice back on February 15 from the NASDAQ’s listing qualifications department advising Long Blockchain that it would terminate the trading of Long Blockchain’s shares pursuant to the NASDAQ listing rule 5101.

The NASDAQ’s continued listing guide states that companies on the exchange must retain a market cap of US$35 million, which the company has been able to do since changing its name from Long Island Ice Tea back in December. Following its name change, shares of Long Blockchain increased over 180 percent to $6.91. The company has a market cap of US$14.76 million as of market close on Wednesday (April 11).

The company, long known for its ice tea beverages, claimed in its December release that that it was in the “preliminary stages” of evaluating opportunities in blockchain technologies, including partnerships, investments and acquisitions involving a blockchain software developer company. By January 2018, Long Blockchain had announced that it had entered into an agreement to acquire 1,000 bitcoin mining machines, but had decided by February that it would not be proceeding with the purchase.

Long Blockchain isn’t the only company whose sudden refocus to blockchain has gotten them in trouble. Riot Blockchain (NASDAQ:RIOT) has been under fire for much of the year after rebranding from Bioptix Diagnostics last October and experiencing a massive share price increase of 89.49 percent in the days following its name change. The company is currently facing multiple lawsuits claiming the company manipulated its share price by changing its name to include “blockchain” despite having any knowledge or expertise in the industry.

Longfin (NASDAQ:LFIN) is also in hot water following a U.S. Securities Exchange Commission investigation into the company following its acquisition of Ziddu.com, a blockchain solutions provider, late last year. Following the acquisition announcement in December, Longfin’s share price soared astronomically from $5.39 to as high as $72.38 over a four-day period, representing an increase of 1,242.85 percent. On Monday (April 9) Longfin received a NASDAQ delinquency compliance plan alert letter, advising the company that it must submit a plan of compliance by Friday (April 13).

While it seems as though there’s a plethora of companies under siege for dipping into the blockchain sector, it should be noted that these companies didn’t have any prior knowledge or expertise in the industry, which has been the cause for concern. There are, however, plenty of others blockchain-related and cryptocurrency-related companies for investor consideration that are better known for their efforts and background in the industry that provide profitable returns.

Following the NASDAQ delisting, shares of Long Blockchain will resume trading on the OTC Pink Current Information Tier on the OTC Markets Group under it same ticker symbol, “LBCC.” The company does, however, intend to apply for listing on the OTCQB Market.

Since Tuesday’s announcement, shares of Long Blockchain have dipped from US$1.77 to close at US$1.10 on Wednesday.

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Securities Disclosure: I, Jocelyn Aspa, hold no direct investment interest in any company mentioned in this article.