Back in my day, it was enough to take an iconic cola brand and make a clear version to boost stock prices. Of course, that didn’t exactly work out for Pepsi in the long term either.
In December of last year, New York-based Long Island Iced Tea Corp. changed its name to Long Blockchain Corp. and everyone lost their collective shit. Directly following the name change, the company soared to a market value of $70 million for no other reason than, well, the name change because people are the worst. In February, NASDAQ announced it would delist the company, and it sits at a modest $5 million market value today.
Now comes news that the SEC would like a word with the drink maker.
According to Bloomberg, the SEC subpoenaed the company on July 10. In a regulatory filing this week, Long Blockchain said the SEC asked for certain documents, without elaborating further.
“The company is fully cooperating with the SEC’s investigation,” Long Blockchain said. “The company cannot predict or determine whether any proceeding may be instituted by the SEC in connection with the subpoena or the outcome of any proceeding that may be instituted.”
As Gizmodo points out, the SEC isn’t exactly thrilled about the idea of random companies slapping “blockchain” on their name just for kicks:
By the way, in a January address, SEC Chairman Jay Clayton told the audience that the agency might be looking into any company dumb enough to, say, change its name to “Blockchain-R-Us” and then sell stock without “providing adequate disclosure… about those changes and the risks involved”:
“I doubt anyone in this audience thinks it would be acceptable for a public company with no meaningful track record in pursuing the commercialization of distributed ledger or blockchain technology to (1) start to dabble in blockchain activities, (2) change its name to something like “Blockchain-R-Us,” and (3) immediately offer securities, without providing adequate disclosure to Main Street investors about those changes and the risks involved. The SEC is looking closely at the disclosures of public companies that shift their business models to capitalize on the perceived promise of distributed ledger technology and whether the disclosures comply with the securities laws, particularly in the case of an offering.”
It’s so ludicrous you wouldn’t believe a company would do such a thing but … well. Shoulda stuck with tea.
The Accounting News Roundup newsletter is back! Every Friday you’ll get a recap of recent content posted on Going Concern, On This Date in Going Concern History, list of hot remote and hybrid accounting jobs, and more. Sign up here today.
