The shift from ‘iced tea company’ to ‘cryptocurrency mining company’ has created a lot of volatility in Long Blockchain (NASDAQ: LBCC) stock price. The company’s share price spiked more than 200% on December 21 when it changed the name from Long Island Iced Tea (NASDAQ: LTEA) to Long Blockchain Corp.
After hitting the 52-week high of $9.49, the LBCC stocks started declining steadily. Long Blockchain stock currently trades at around $3 a share. LBCC shares lost 57% of their price since hitting the 52-week high in December.
The downward movement in Long Blockchain shares was mainly blamed on the crash in cryptocurrency prices. Crypto markets lost almost half of the market capitalization over the last month.
Why Long Blockchain Shifted the Business Model?
The company changed its business model and future strategies to capitalize on the emerging opportunities in the blockchain industry.
It is looking to create a portfolio of investments that should have the capacity to cover numerous points in the blockchain ecosystem.
Management said, “technologies are creating a fundamental paradigm shift across the global marketplace, with far-reaching applications across all industries from financial services (smart settlements) to consumer packaged goods (supply chain verification) to healthcare (electronic medical records).”
The News of Merger Weighed on Traders Sentiments
The crash in cryptocurrencies prices significantly impacted traders sentiments; forcing Long Blockchain to retreat from an earlier plan to purchase 1K cryptocurrency mining units.
Apparently, the company failed to raise sufficient capital to support the purchase.
Instead, the company started focusing on the merger with the U.K.-based crypto brokerage Stater Blockchain.
Stater Blockchain Limited is a Financial Conduct Authority-regulated brokerage that helps market access across multiple instruments including, digital currency futures, spot FX, and contracts for difference (CFDs).
Chief Executive Officer of Long Blockchain, commented, “We are excited to announce this potential milestone event for the Company. Stater has been making investments to build its cryptocurrency platform and blockchain solutions, and we look forward to combining our efforts in this transformational partnership. “
Investors haven’t applauded Long Blockchain’s decision of giving up on the strategy of purchasing 1K cryptocurrency mining units; resulting in pressure on the stock price.
Featured Image: Depositphotos/Peshkova