Long Blockchain Corp. (NASDAQ:LBCC) will no longer be acquiring the bitcoin mining rigs that it stated it would be purchasing.
Despite previously announcing the upcoming purchase of the 1,000 Antminer S9 mining rigs and 1,000 APW3++ PSUs at the beginning of January, Long Blockchain has now decided against this move. Instead, the company is planning to focus solely on its proposed merger with Stater Blockchain Limited.
Stater Blockchain is a technology company that develops and deploys globally scalable blockchain technology solutions.
>> Why are blockchain stocks down?
On the day of the announcement, Long Blockchain closed at $3.11, which was up $0.07, or 2.30%, from the previous closing price of $3.04. Now, however, the company’s stock has dropped. Long Blockchain ended Monday’s trading session at $2.87, putting it down $0.24, or 7.72%, from Friday’s closing price.
From potentially being de-listed on Nasdaq to its decision not to buy the mining rigs, Long Blockchain has been unreliable lately. This makes announcements by the company hard to believe. Long Blockchain says it will now focus on the proposed merger with Stater Blockchain, but will it? The company said it was going to buy Bitcoin mining machines and now it’s not, so what does it plan on doing?
Investors need a company they can trust. Long Blockchain hasn’t been doing a lot to instill that trust into investors. That lack of trust, plus the lack of follow-through by the company, may be part of the reason why Long Blockchain is trading down today and has been declining for the past four weeks.
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The huge jump that companies like Long Blockchain Corp. experienced when making crypto-related announcements (Long Blockchain, then Long Island Iced Tea, witnessed a near 280% stock increase on December 21st after announcing its potential shift to blockchain) has led to regulatory concerns by bodies such as the SEC. The SEC, along with the CFTC, have been calling for regulations to be put into place on anything crypto related, included blockchain, ICOs, etc. On Tuesday, the Senate Banking Committee will be holding a hearing to discuss these regulatory actions and the role of the SEC and CFTC.
Featured image: coindesk
