Not even blockchain could keep a struggling beverage maker from getting kicked out of the Nasdaq.
The company, now known as Long Blockchain after changing its name from Long Island Iced Tea Corp. in December, said Wednesday that the stock exchange would delist it, upholding an earlier decision from February. Long Blockchain hasn’t been able to keep its market value above the exchange’s $35 million minimum requirement, so trading of its shares on Nasdaq will be halted Thursday.
Wednesday’s announcement is the latest hit to a company whose bitcoin-inspired transformation was seen as the height of cryptocurrency euphoria. Blockchain is the technology that underpins bitcoin.
Long Blockchain shares were down 42% Wednesday to $1.02, putting the firm’s market capitalization at roughly $13 million. The firm was valued at nearly $70 million in late December after it announced it was switching its name and pivoting to focus on blockchain while a subsidiary continued to sell tea.
A visit to the firm’s Long Island office right after it changed its name showed that it operates a 10,000 square-foot supply warehouse used for distribution of its nonalcoholic beverages.
Shares of the firm climbed 183% to $6.91 immediately following the name change, but a drop in the price of bitcoin and other cryptocurrencies and the prospect of increased regulation by the Securities and Exchange Commission have hurt blockchain stocks in recent months. Bitcoin had its second-worst quarter ever in the first three months of 2018 and has dropped roughly 50% this year to trade around $7,000, according to CoinDesk.
Another firm that emphasized its ties to cryptocurrencies and the blockchain technology associated with them, Overstock.com, has fallen about 40% in 2018 and pulled its secondary stock offering. Riot Blockchain is down more than 75%. And Longfin Corp., another cryptocurrency company, has been accused of violating securities laws by the SEC.
According to Wednesday’s press release, Long Blockchain will continue to trade publicly and transition to the over-the-counter market. The transition “does not diminish the focus of its efforts to become a leader in blockchain technology.”