Optimum Customers: Your Newsday access has been extended until Oct 1st. Enroll now to continue your access.

LEARN MORE
TODAY'S PAPER
74° Good Evening
74° Good Evening
Business

Long Blockchain abandons plan for stock sale

The company, known as Long Island Iced Tea before its pivot to cryptocurrencies, still plans to buy specialized computing equipment.

Long Blockchain chief executive Philip Thomas.

Long Blockchain chief executive Philip Thomas. Photo Credit: Long Blockchain Corp.

Long Blockchain Corp., the cryptocurrency company formerly known as Long Island Iced Tea, “is not proceeding” with a sale of up to 1.6 million shares of common stock, but is continuing to pursue its plan to buy specialized computing equipment to “mine” digital currency.

In a news release issued Tuesday, the company said that it “can make no assurances that it will be able to finance the purchase of the mining equipment” and gave no reason for abandoning the stock sale, which was expected to generate proceeds of $7.8 million, according to a prospectus supplement filed on Friday.

Shares of the Farmingdale company fell 4.3 percent to close Wednesday at $5.55.

A call and email to Long Blockchain chief executive Philip Thomas were not immediately returned.

Blockchain is the decentralized digital ledger that records transactions for bitcoin and other digital currencies, also called cryptocurrencies, across many computers. Cryptocurrencies are not tied to a bank or government and allow users to spend money anonymously.

“Miners” use high-powered computers to authenticate and encrypt bitcoin transactions. Once the transaction is authenticated and added to the blockchain, the miners typically are paid in bitcoin.

Craig Ferrantino, president of Craig James Financial Services LLC, a Melville investment and financial planning firm, said Long Blockchain could have difficulty in getting broad support from investors.

“It’s an unknown technology that investors may have an interest in, but when you look at the financials, it’s hard to wrap your head around,” he said.

Long Blockchain’s stock has more than doubled since its Dec. 20 announcement of a “pivot” in its business from bottled and canned ready-to-drink beverages to cryptocurrency and blockchain technology.

The stocks of several other companies have risen after announcing a connection to cryptocurrencies. On Tuesday, Rochester-based Eastman Kodak Company said it was creating its own cryptocurrency, “KodakCoin,” sending its stock up more than 100 percent in one day.

On Wednesday, bitcoin, the most prominent digital currency, edged up 0.04 percent to $14,488 at about 5:30 p.m., according to CoinDesk. Bitcoin has climbed more than 1,500 percent in the past 12 months.

More news