After Nasdaq threatens to delist Long Blockchain Corp. for the second time, the company approves new beverage spinoff and CEO.
After Nasdaq gave a delist notice Friday, Feb. 16 to Long Blockchain Corp. for low market capitalization, the company, previously a soft drinks brand, has decided to make a last ditch effort at preserving its original beverage business. Long Island Brand Beverages LLC (LIBB) is officially breaking from its parent company Long Blockchain Corp. (LBCC), according to a press release given to GlobeNewsWire on Tuesday, Feb. 20th.
Nasdaq had threatened to delist the formerly named Long Island Iced Tea Corp. in October 2017. The company renamed itself to Long Blockchain Corp. in late December 2017, seeing an almost immediate 500% increase in stock price, which helped it avoid being dropped by Nasdaq.
Long Blockchain Corp. announced yesterday in their press release their intent to pursue a complete spin-off of the original beverage brand by the second quarter of 2018. While the company’s name change has been ridiculed in the crypto community as a way to make a quick buck, former CEO Philip Thomas said in the press release that it was part of the plan all along:
“It was always our intention to spin off our beverage business following our shift to Blockchain technology and we believe that it is currently the appropriate time to take such action. Shamyl has shown great initiative and leadership since joining the team, and his appointment as CEO and our planned spin-off will allow the Company to execute on a clear, focused Blockchain strategy.”
The press release announced that Shamyl Malik, a veteran of financial technology, will be taking the reigns as new CEO of Long Blockchain Corp to develop and invest in globally scalable “on-chain” blockchain technology solutions.
LIBB, now a wholly owned subsidiary of Long Blockchain, will split from Long Blockchain in the most appropriate manner: a “hard fork” if you will, which will allow stockholders equal claim to LIBB stocks and LBCC stocks at the time of the spin-off.
“It is anticipated that the spin-off will provide shareholders the opportunity to capitalize on both the Company’s new Blockchain business and the value to be created by LIBB’s ongoing growth. Stockholders will own the same percentage of LIBB as they currently own in the Company,” stated Philip Thomas.
LIBB isn’t the only company to change its name to include the word “Blockchain”, potentially as a PR stunt. In January, 2018 at the Securities Regulation Institute, SEC Chairman Jay Clayton issued a warning specifically to companies that are hopping on this bandwagon, saying that the SEC will increase scrutiny in such cases.