Traditional companies seeking to capitalize and jump in on blockchain growth
As the blockchain sector heats up looks, it looks like there are many companies that want to go ahead and jump in and take advantage, even if they have nothing to do with the blockchain sector or can’t be a disruptor in any way be the integration of the technology.
The latest of these companies has been one company based in the city of Long Island, New York.
The company which goes by the name of Long Island Iced Tea Corp. has seen significant growth in its share price by doing one simple and extraordinary move.
The Extraordinary move
What was this simple and extraordinary move? Simply announcing that they would be now be calling themselves the Long Blockchain Corp. Yes, they went ahead and rebranded themselves and made and then made an announcement saying that they were now stepping into the blockchain space.
The market heard their reformation cry and rewarded them with their outlook and innovative capabilities, this newly branded company, just a mere tea company from long island and was now a blockchain company, saw it’s share rise up at least upwards of 250%.
Before the announcement the micro-cap company was trucking along and experiencing regular day to day fluctuations. Then they saw the prices of shares increase, allowing them to sip on some of their long island tea and enjoy a market capitalization of $67 million.
After the announcement, the company was now something more. But was it truly something more? Not really. One can’t wake up one morning and announce that they are an Olympian if prior to, they conducted no training and lived in a manner where one could reasonably make such an announcement.
Yet, the market saw this and the shares of the company skyrocketed.
The issues with this approach
This is a problem for a variety of reasons, the primary reason is that it could take away capital from projects that truly are blockchain based and are contributing toward that ecosystem. The next issue is that if these traditional companies, whose primary activities stem in activities that are not blockchain based in any manner, are allocated capital that doesn’t go toward furthering the space, it tarnishes the growing industry ever so slightly. The tarnishment can add to increase cynicism, which is not necessarily good for a growing industry. A growing industry that truly does have a tremendous amount of potential if utilized, fostered, and nurtured correctly.
Many traditional corporations jumping in to enjoy similar growth
This is only one of many companies that are stepping in to enjoy the growth that is being experienced by simply affiliating with the cryptocurrency and blockchain space.
This current sort of trend to rebrand was also experienced in the mid to late 90’s as the internet economy was developing.
Regular companies who were involved in non-internet sectors were simply stating that they were affiliated to the internet sector in some way and were able to see the share prices jump, yet many of these companies had no intention of ever becoming integrated into the internet sector in any way.
This re-emergent phenomenon provides more ammunition to those that say that there might be a bubble in the blockchain space.
The progress made by the company
Yet, LTEA might be a company that could progress and take actions in the blockchain space as they have announced today that they have “entered into a two-million-dollar convertible debt facility, with an additional two-million-dollar option, to support the shift of the Company’s primary corporate focus towards the exploration and investment in specific ventures relating to blockchain technology.”