Microcap companies are increasingly announcing rebrandings and strategic shifts towards cryptocurrency and blockchain businesses as they look to capitalize on bitcoin's price surge in 2017. On Thursday, Long Island Iced Tea (LTEA), a maker of iced tea and other juice beverages, became the latest company to reinvent itself, sending its stock sharply higher.
LONG BLOCKCHAIN: Long Island Iced Tea announced that it is shifting its primary corporate focus towards the exploration of and investment in blockchain technology opportunities . In connection with the shift, the company changed its name from "Long Island Iced Tea Corp." to "Long Blockchain Corp." and has reserved the web domain www.longblockchain.com. The company, which plans to request a trading symbol change from Nasdaq, will continue to operate Long Island Brand Beverages as a wholly-owned subsidiary and maintain the focus of that business on the ready-to-drink segment. Long Island Iced Tea also submitted a request to the Securities and Exchange Commission to withdraw its filed registration statement relating to a proposed underwritten public offering. The iced tea maker added, "The company is already in the preliminary stages of evaluating specific opportunities involving blockchain technology. The discussions are only in the preliminary stages but indicate the areas of focus for the company."
SEVEN STARS: On Wednesday, Seven Stars Cloud Group (SSC) announced a 27% purchase of The Delaware Board of Trade Holdings, a blockchain-based alternative trading system fully licensed by the SEC, for 1,627,869 shares of SSC common stock. The transaction makes SSC the largest shareholder of DBOT and puts SSC president and chief revenue officer Robert Benya on DBOT's board.
LONGFIN: On Friday, Longfin (LFIN) announced the acquisition of Ziddu.com, a blockchain-empowered solutions provider that offers microfinance lending against collateralized warehouse receipts in the form of Ziddu Coins. A Ziddu Coin is a smart contract that enables SMEs, processors, manufacturers, importers and exporters using cryptocurrencies across continents. Following the announcement, shares of Longfin rose. However they dropped on Tuesday after Longfin CEO Venkat Meenavalli attributed the rise to "euphoric mania" and a small float in an interview with CNBC. He added that the company's market capitalization at the time was not justified.
BIOPTIX BECOMES RIOT BLOCKCHAIN: On October 4, Bioptix announced it was changing its name to Riot Blockchain (RIOT) in line with a shift in direction to become a strategic investor and operator in the blockchain ecosystem with a focus on bitcoin and Ethereum. As part of this focus, the company announced it made a strategic investment in Canadian exchange Coinsquare. "This investment into a blockchain-focused company is indicative of similar opportunities Riot Blockchain plans to pursue, including possible acquisitions of businesses serving the blockchain ecosystem," the company said. In addition, Riot Blockchain, which also made a strategic investment in blockchain technology company Verady, announced on November 2 that it had entered into a definitive agreement to acquire cryptocurrency mining equipment consisting of 700 AntMiner S9s and 500 AntMiner L3s manufactured by Bitmain. On Tuesday, however, Citron Research tweeted, "$RIOT is THE most traded retail stock in market today yet Citron believes they are making fraudulent claims to investors. We challenge CEO John O'Rourke to a live debate on CNBC Fast Money today. We will be there." NXT-ID: On Wednesday, Fit Pay, a wholly owned subsidiary of NXT-ID (NXTD) and Cascade Financial Technology, announced an agreement for the joint development of a platform that enables cryptocurrency holders to use the value of their currency to make purchases at millions of retail locations. "As cryptocurrencies increase in value and distribution, the need to create new methods to monetize their value and enabling models for acceptance is the critical last mile," said Michael Orlando, NXT-ID COO and president of Fit Pay. Following the announcement, Maxim analyst Brian Kinstlinger said that while the details are not clear, he believes the cyptocurrency platform may be ready as early as the first half of 2018 and may have the potential to increase the number of traditional retailers that accept cryptocurrencies. He maintains a Buy rating and $5 price target on Nxt-ID shares.
PRICE ACTION: This morning, Long Island Iced Tea surged nearly 200% to $7.09 per share. Shares of all of the others stocks mentioned above have also been volatile since announcing their intentions to get involved with either bitcoin or blockchain technologies.
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