Long Blockchain Corp., the Farmingdale company formerly known as Long Island Iced Tea Corp., announced Friday that it had named a new chairman and chief executive and formed a subsidiary focused on loyalty and gift-card programs for corporate brands.
The new chairman and CEO, Andy Shape, replaces Shamyl Malik, a financial services industry veteran who took over in February.
Shape is co-founder and President of STRAN & Co. Inc., a promotional marketing company based in Quincy, Massachusetts, that will “partner” with the new Long Blockchain subsidiary.
In a statement, Shape said he plans to use “distributed ledger technology,” a description of blockchain, in loyalty programs, in which businesses award faithful customers with prizes, points and other incentives.
“Consumer brands and corporations realize that loyal customers not only purchase more goods but that they also purchase more often,” he said. Shape acknowledged that Long Blockchain “has not taken any steps toward developing any such technology.“
Malik, who stepped down “to focus on his other business affairs,” according to the news release, had added the title of chairman of Long Blockchain in May.
Shares of Long Blockchain fell 11.1 percent to close Friday at 32 cents.
Twelve months ago, the stock was trading at $4.72 when the company was focused on marketing ready-to-drink beverages. The stock price eroded to around $2 later in 2017, but more than tripled to $6.91 in late December after the company announced it was changing its name and focusing on cryptocurrency and blockchain technology.
Long Blockchain’s new subsidiary will be called Stran Loyalty Group and will partner with STRAN, which operates under the name Stran Promotional Solutions, the company said.
Long Blockchain and STRAN & Co. did not return phone calls seeking further comment.
Long Blockchain said in February it was abandoning a plan to buy 1,000 special computers and power supplies used to “mine” the cryptocurrency bitcoin.
The same month, the Nasdaq Stock Market said the company tried to “mislead investors” by riding the tide of interest in bitcoin and blockchain technology. Nasdaq moved to delist the company. In April its shares began trading on the OTC Market Group’s OTCQB market for early-stage companies.
In March, Long Blockchain was the target of jokes during a 25-minute cryptocurrency satire by John Oliver on HBO.
Bitcoin and other types of cryptocurrency are digital currencies that are not tied to a bank or government. The coins are created by users who “mine” them by lending computing power to verify other users’ transactions. They receive coins in exchange.
A blockchain is a global running ledger of every transaction in the currency. The technology is also being developed for a variety of other uses, including stock transactions and health care.
Rob Enderle, principal at the Enderle Group, a Bend, Oregon, research firm, said that blockchain technology could offer a way to secure rewards programs, which have been subject to fraud.
“It is really hard to scam a blockchain,” he said.
Though blockchain transactions tend to be slower than some competing technologies, “a couple seconds aren’t going to make a difference,” he said.