(Bloomberg)– There’s a new leader in the sweepstakes for the zaniest name change in the crypto craze.Long Island Iced Tea Corp. shares rose as much as 289 percent after the unprofitable Hicksville, New York-based company rebranded itself Long Blockchain Corp.
It’s the latest in a near-daily phenomenon sweeping the stock market, where obscure microcap companies reorient to focus on some aspect of the mania sparked by bitcoin’s 1,500 percent rally this year.
Long Blockchain, whose business has been selling non-alcoholic beverages, says it will now seek to partner with or invest in companies that develop the decentralized ledgers known as blockchain, the technology that underpins bitcoin.
The re-named firm joins the ranks of recently christened crypto companies — a list that includes former makers of juice, sports bras and sofas — whose share prices have all rocketed after their respective announcements. Some are likening the mania to the dot-com boom, and ultimate bust, two decades ago.
“It’s so reminiscent of what happened in the late 1990s,” Scott Nations, author of ‘A History of the United States in Five Crashes,’ said by phone. “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.”
The shares surged to as high as $9.49 before closing at $6.91 in New York trading, compared with $2.44 Wednesday. More 15 million shares changed hands, compared with average daily volume of about 170,00 shares over the prior three months.
Long Blockchain’s shares may be benefiting from the announcement, but so far the company has little to show for its aspirations. It has no agreements with any blockchain firms, and says “there is no assurance that a definitive agreement with these, or any other entity, will be entered into or ultimately consummated.” A request for comment from Chief Executive Officer Philip Thomas wasn’t immediately returned.
Eric J. Watson is the largest shareholder of Long Island Iced Tea Corp. with more than 13 percent of outstanding shares, according to U.S. Securities and Exchange Commission filings. Watson, a resident of the U.K., is the founder and executive chairman of Cullen Investments, which the firm says on its website has holdings in fashion retail, financial services, agriculture, real estate and sports and entertainment in the U.S., Britain, New Zealand and Australia.
In conjunction with the change in focus, the company canceled a planned share sale. Long Island Iced Tea, the product of a 2015 merger with Cullen Agricultural Holding Corp., has been funding operations through a combination of equity and debt sales. It has a market value of about $67 million in after the surge in the stock price.
Long Island Iced Tea had a net loss of $3.9 million on sales of $1.6 million in the three months ended Sept. 30. The company has lost $11.6 million on sales of $3.9 million in the first nine months of the year.
The company has reserved the web domain name www.longblockchain.com and will still operate a ready-to-drink beverage subsidiary.
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,” Nations said. “To me, that just confirms that we’re in a bubble.”