Long Island Iced Tea Corp. launched in 2011 with a variety of ready-to-drink iced teas, growing into a $24 million business along the way. As the parent company to its wholly-owned subsidiary, Long Island Brand Beverages, LLC, the Hicksville, New York-based company operates in the non-alcohol ready-to-drink segment of the beverage industry under its flagship brand, The Original Long Island Brand Iced Tea, at the center of its portfolio of beverages.
Not any more. On Thursday, the corporation announced it’s rebranding its name to Long Blockchain Corp. and shifting focus to a hot new business. Inspired by bitcoin mania, it’s pivoting towards the burgeoning blockchain technology market, and will look to acquire and develop blockchain businesses, while keeping its beverage business as a subsidiary to sell “premium ‘better-for-you’ brands marketed at an affordable price.”
“We view advances in blockchain technology as a once-in-a-generation opportunity, and have made the decision to pivot our business strategy in order to pursue opportunities in this evolving industry,” said CEO Philip Thomas in a press release about the move in focus from CPG to financial services and fintech.
“We are committed to enhancing shareholder value and believe that our new focus is the best path towards this goal. We will, in the coming weeks and months, be taking a series of steps related to our efforts to assemble a world-class team of industry professionals to help us realize this vision. We are pursuing our new direction in a thoughtful and deliberate manner.”
The company will ask NASDAQ to change its trading symbol and has reserved the web domain and has reserved the web domain longblockchain.com.
Its stock price rose nearly 200% after the news, but a day after announcing its rebrand and tying its future to bitcoin, the digital currency fell sharply in price—a reminder that it’s still an emerging, volatile platform.
Blockchain is a public, decentralized ledger that offers a single, unified source of data, replete with a clearer audit trail and consistency across parties. The Long Island Iced Tea parent company sees opportunities in financial services (smart settlements), consumer packaged goods (supply chain verification) and healthcare (electronic medical records).
The strategic change heralds opportunities for partnerships, investments or acquisitions involving:
· A blockchain software developer building blockchain infrastructure for the financial services industry
· A London-based FCA regulated, institutional provider of FX services that is building multiple blockchain and digital crypto currency technology solutions for global financial markets
· A new smart contract platform for building decentralized applications that provides scalability beyond currently available options.
“I am incredibly proud of what we have accomplished in the beverage industry and we are committed to growing our business both on a national and international scale,” Thomas stated in a letter to stakeholders.
“I want to assure our beverage industry customers, suppliers, and partners of our continuing support of the Long Island Iced Tea portfolio of beverages. Your support over the years has helped to drive our growth and elevate our brand, and we remain committed to maintaining and fostering these relationships.”
— Bloomberg (@business) December 21, 2017
Wall Street and investors agreed, sending its share price soaring some 500% after the news broke on Thursday. Long Island Iced Tea isn’t the first or even the strangest company to cash in on the bitcoin craze. Bitcoin’s value reached a high of over $15,000 earlier this month, and Bloomberg notes the craze has caused rebranding in sports bras, juice, sofas and e-cigarette companies.
Shares of Long Island Iced Tea rose as much as 289% after the rebrand, a nearly everyday occurrence as companies follow the crypto-craze. More than 15 million shares changed hands, compared with average daily trading of about 170,000 shares since September.
— TicToc by Bloomberg (@tictoc) December 21, 2017
“It’s so reminiscent of what happened in the late 1990s” with the dotcom boom, said Scott Nations, author of A History of the United States in Five Crashes, to Bloomberg. “A company that had nothing to do with the internet would put out a press release that they were going to become an internet company now, and the same sort of thing would happen.”
Nations concluded, these “sorts of companies that go up the course of five or 10 times in one day just because they say that they’re a blockchain company now. To me, that just confirms that we’re in a bubble.”
Adam White, VP Coinbase, a high-profile digital currency exchange, commented to the Washington Post that “What makes Ethereum and bitcoin, these open blockchains, so powerful is that at the end of the day they’re really a protocol. They look much more like TCP/IP, the backbone of the Internet, or SMTP, what powers email. And from that it introduces so many opportunities, so many new business models.”
It also brings higher trust through verification to transactions as opposed to hard currency as a tracking chain makes it near impossible for a hacker/fraudster to spend a bitcoin twice.
As the Post notes, “Where bitcoin goes from here is anybody’s guess. But for the moment, all the excitement around Wall Street finally adopting bitcoin as an investment vehicle has businesses like Long Island Iced Tea leaping before they look.”
On Friday, a sobering reminder that Bitcoin isn’t infallible, falling twice to drop from $19,500 to less than #12,500.
Bitcoin falls from $19,500 on Monday to below $12,500 (twice) on Friday https://t.co/ZrSj9Q4Rhe
Here's what you need to know: https://t.co/bpnht4Q7lW
— Bloomberg (@business) December 22, 2017