Nasdaq wants to boot an iced tea maker off its exchange for allegedly trying to fool investors caught up in the cryptocurrency mania.
Last year’s rebranding of Long Island Iced Tea into Long Blockchain symbolized the moment that the bitcoin movement went from a boom to a craze. The bizarre makeover from Long Island beverage company to blockchain powerhouse sent the stock spiking nearly 200% the same day.
Long Blockchain, as the company is now known, said in a filing on Wednesday that Nasdaq has accused it of making a series of public statements “designed to mislead investors.”
Nasdaq wrote a February 15 letter to Long Blockchain saying it believes the company attempted to “take advantage of general investor interest in bitcoin and blockchain technology.”
Citing “concerns about the Company’s suitability for exchange listing,” Nasdaq said it plans to use its “discretionary authority” to delist Long Blockchain.
Long Blockchain said it “strongly disagrees” with Nasdaq’s determination and has appealed the delisting decision. The appeal means the stock, listed under the ticker symbol “LBCC,” will continue to trade, for now at least.
On Tuesday, days after the Nasdaq letter, Long Blockchain appointed a new CEO and announced a plan to spin off its beverage business.
The Long Blockchain situation brought back memories of the dotcom bubble, when some companies added “dotcom” to their end of their names to seize on the insatiable appetite for internet stocks.
Similarly, the cryptocurrency boom led other companies to change their names and business models. For instance, shares of Bioptyx spiked after it transformed from a biotech company to Riot Blockchain.
It’s not the first time Long Blockchain has run into trouble with Nasdaq.
In October, months before its name change, Long Island Iced Tea was warned by Nasdaq that its market value was so tiny — below $35 million for 30 days in a row — that it could be delisted. The exchange gave the company until April 2018 to fix the issue.
The company managed to lift its market value — dramatically — but in a way that apparently alarmed Nasdaq.
The plunge in prices for bitcoin and other cryptocurrencies has sent Long Blockchain back to levels it was at when it was just an iced tea company.
Long Blockchain said that in order to regain compliance with the Nasdaq’s requirements, its market value must remain at $35 million or more for at least 10 straight business days. The current stock price of $3.05 implies a market value of about $30 million.
–CNNMoney’s Paul R. La Monica contributed to this report.
