The tea company that planned to buy bitcoin mining machines is backpedaling on its plans
- The Long Island Iced Tea Corporation changed its name to Long Blockchain in December and its stock price skyrocketed 400%.
- The company planned to sell more stock to raise money for bitcoin mining rigs, but it has since balked on the capital raise.
Long Blockchain, which until December was known as the Long Island Iced Tea Corporation, has walked back its announcement to raise capital through a new stock issuance in order to purchase 1,000 bitcoin mining rigs, the company said Tuesday in a press release.
The company, which has not responded to multiple requests for comment, had originally planned to raise $8.4 million by selling 1,603,294 shares at a price of $5.25 per share to finance the purchasing of 1,000 S9 Antminer machines, which sell online for $2,725 a piece. That would leave the company with an extra $5.69 million in cash that it did not explain its plans for.
Long Blockchain still plans to purchase the rigs, it said, but it is unclear with what money. According to the press release, "The Company can make no assurances that it will be able to finance the purchase of the mining equipment." According to its most recent earnings report for the quarter ended September 30, 2017, the company had $439,673 in cash on hand, but reported a loss of $0.43 per share.
Long Island Iced Tea originally pivoted to its new name and focus back in December 2017, when the name change sent its stock soaring by 400% and saved it from being delisted by Nasdaq.
An investigation by Bloomberg news in January revealed that top shareholders of the Long Island, New York-based company have ties to model Heidi Klum, a Kennedy heiress, and the owner of a New Zealand rugby team known for lavish, supermodel-filled parties.
Shares were trading at $6.39 Tuesday morning - still up more than 200% since last month's pivot.
You can read about some other seemingly ridiculous pivots to blockchain in our full roundup here>>
