Hitch Bitcoin bandwagon and hope for the best
portland — What’s in a name? These days, if it’s anything close to “Bitcoin,” it’s Wall Street gold.
The latest example of a company trying to tie its fortunes to the cryptocurrency craze in the form of an iced tea maker.
Long Island Iced Tea until last week was known for its ready-todrink beverages in flavours such as peach, raspberry, guava, lemon and mango. But it said that it was undertaking a radical rebranding.
The company announced it will now be known as Long Blockchain, shifting its primary focus from iced tea to “the exploration of and investment in opportunities that leverage the benefits of blockchain technology”. Blockchain is a ledger where transactions of digital currencies are recorded. The name change was enough to send the shares of the company based in Hicksville, New York, soaring almost 200 per cent on Thursday.
By Friday at the opening bell, some of that buying frenzy had begun to ebb, with the notoriously volatile Bitcoin giving up 23 per cent of its value overnight.
Shares of the iced tea maker tumbled 24 per cent.
“There is craziness going on,” said Emin Gun Sirer, an associate professor of computer science at Cornell University. “There always is when there is exciting new technology.” Long Island Iced Tea, or Long Blockchain, is not the first firm to get a Bitcoin-related boost and likely will not be the last, experts say.
Bioptix, a biotech company based in Colorado, announced in October it was changing its name to Riot Blockchain to reflect its new focus. Its stock is up about 250 per cent, even after a 24 per cent drop on Thursday. Overstock. com’s shares have risen 285 per cent this year as the online retailer has announced it would accept Bitcoin for purchases and make a coin offering through its exchange.
It’s a jump-on-thebandwagon-and-make-aquick-buck time. It’s not a serious business play Allen Adamson, branding expert
And British company Online’s stock soared nearly 400 per cent in October when it announced plans to change its name to On-line Blockchain.
Nova Lifestyle, a modern furniture company, also got in on the action, saying that it would be start accepting Bitcoin and other major cryptocurrency and announcing the creation of a subsidiary called “I Design Blockchain Technology Inc”. Its stock rose 18 per cent.
Given the recent skyhigh surge in Bitcoin and other cryptocurrencies, this halo effect isn’t entirely surprising. It is also reminiscent of the dot-com craze of the late ‘90s when seemingly sleepy stocks would rocket when they appended a “dot-com” to their names, said Jack Ablin, chief investment officer at BMO Private Bank.
Any time there is a major disruption in an industry or hot new technology, other companies will want in, said branding expert Allen Adamson. But he said that without a business or technology plan, it’s a fraud. “It’s a jump-on-the-bandwagon-and-make-a-quick-buck time,” Adamson said. “It’s not a serious business play.” —