Hey everybody! Welcome back to Business on the Blockchain. We’ve previously brought you some rather promising projects. However, today we’re going over a project that could be filed under business on the blockchain gone wrong.
Enter Long Island Iced Tea
At the end of 2017, there was a smaller company called Long Island Iced Tea that had a simple mission — to keep people hydrated with a variety of different iced tea beverages. The company was publicly traded and looked to be growing as they pushed to be stocked in more and more markets.
This all changed last December. If you can think back to then, the cryptocurrency markets were booming with one bitcoin going for about $20,000. Awareness about cryptocurrency and blockchains were coming to the mainstream. Major news outlets started to look into this new blockchain and cryptocurrency thing, and the result was more and more people were forced to pay attention. Businesses also took notice, as the rapidly growing market seemingly offered new opportunities, and they didn’t miss out. Most set out to explore cryptocurrencies and blockchain technologies, but some projects decided to dive in head first.
Iced Tea meets Blockchain
Long Island Iced Tea was one of these projects. In December they announced that they were diversifying and re-branding to Long Blockchain Corp. They decided to abandon their focus on delicious refreshing iced tea and focus on the less delicious, but very intriguing blockchain technology.
The response was swift and overwhelmingly positive. Long Blockchain Corp. saw it’s stock increase threefold in a weeks time. Just because of an announcement. Blockchain technology was so hot it got an Iced Tea company to jump on board.
Seems like a genius business plan. Ride the wave while the technology is hot and use it to diversify for first movers advantage in the blockchain space. Long Blockchain was seemingly going all in.
And then they weren’t… As the price of bitcoin and other cryptocurrencies plummeted, the company abandoned plans to buy several cryptocurrency mining machines. The company was not liquid enough to make that purchase, probably because of that re-brand, so they would have to sell off a lot of stock in order to make the purchase. Because of this, and the reduced profitability in mining, the company abandoned these plans.
Recent comments indicate that the company has no intention of abandoning its blockchain plans. However recent balance sheets show that the company has no cryptocurrency or blockchain assets. Now the company is expected to report huge losses. It looks as if Long Blockchain Corp. tried to ride the blockchain wave, but wiped out. It is a cautionary tale for any company looking to jump into the very new and volatile blockchain space.
Business on the Blockchain is a new series aimed at keeping you up to date on all of the big business moves towards blockchain technology. More and more businesses are exploring cryptocurrencies and blockchain, and we’re here to help you understand how some of these businesses are making this transition. It’s an exciting time for blockchain adoption, check out which businesses are jumping onto the wave!
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