If you own a small business and want to spike the price of your stock, just stick blockchain in your name, because apparently it works.
According to reports out this afternoon, Long Island Tea Corp, a company that produces bottles of flavoured iced tea, decided to change their name to ‘Long Blockchain Corp’ in December 2017. As a result of this, the price of the companies shares shot up from under $5 million, to almost $70 million in just a few days.
Did they do this on purpose in order to achieve a price shoot?
It does seem to be the case and therefore, it has initiated a an investigation by the United States Securities and Exchange Commission (SEC), that has led to a subpoena being served against Long Island Tea Corp, or Long Blockchain Corp of whatever they are called. This is because they have announced new plans to restructure the business under a new group called the Stran Loyalty Group. It all sounds a bit rogue and therefore, the SEC want to get involved.
According to The Next Web:
“This is not the first time the Long Island-based tea company has gotten in trouble recently. Indeed, Nasdaq previously threatened to delist the company. It appears its issues with the SEC this time have to do with its recent plans to restructure its business. The company founded a new subsidiary called Stran Loyalty Group, which plans to offer loyalty card, incentive and reward schemes.”
A representative for the company has commented:
“The company is fully cooperating with the SEC’s investigation. The company cannot predict or determine whether any proceeding may be instituted by the SEC in connection with the subpoena or the outcome of any proceeding that may be instituted.”
See the full article for yourself, here.
Whilst this whole thing sounds to be totally illegal, it’s so interesting that simply by adding the word ‘blockchain’ to their company name, this group managed to encourage a 500% spike in the value of their stock. Even though it’s pretty clear this company have nothing to do with blockchain technology.
The world blockchain is clearly more powerful than we first thought.