That didn’t take, uh, long.
Long Blockchain Corp. and Longfin Corp., two firms whose shares skyrocketed last year after they rebranded as blockchain businesses, are set to be ousted from the Nasdaq Stock Market. Their removal signals the end of a brief era when everyone from soft-drink companies to cigar makers was cashing in on investors’ mania for cryptocurrencies and their underlying technology.
Long Blockchain was already facing potential delisting in December when it shifted its focus from iced tea to crypto. The company said Tuesday that it’s being suspended by Nasdaq on April 12 pursuant to a rule that gives the exchange operator the power to boot firms with histories of misconduct.
Hours before that announcement, Longfin, the fintech-turned-crypto firm that’s in trouble with U.S. regulators, said it received a Nasdaq delisting notice because it didn’t file its quarterly report on time.
As Bitcoin streaked toward a record high in December, a rash of firms that had little or no experience with cryptocurrencies or blockchain technology used the buzzwords as an antidote for lackluster stock returns. Even Eastman Kodak Co. shares, which have languished for years, skyrocketed after the photography pioneer said in January that it was joining with another firm to create a digital token called KodakCoin.
But the fun seems to be coming to an end for many of the stocks, which have lost steam in recent months amid a steep drop in the price of Bitcoin.
Share performance aside, Longfin and Long Blockchain have had a tough time proving themselves to investors and regulators.
Last week, the U.S. Securities and Exchange Commission obtained a court order freezing more than $27 million in proceeds from the sale of Longfin shares, saying the gains came from illegal trades by insiders. (An attorney representing Longfin didn’t respond to a request for comment at the time.)
The agency had also been investigating the New York-based company’s acquisition of Ziddu.com, which Longfin has described as “a blockchain-empowered solutions provider that offers microfinance lending against collateralized warehouse receipts in the form of Ziddu Coins.” That followed the firm’s ouster from the Russell 2000 Index less than two weeks after joining, and the resignation of its accountants, who said they found “material weaknesses” in the company’s financial reporting.
As for Long Blockchain, formerly Long Island Iced Tea Corp., Nasdaq had threatened to delist it in October -- before the name change -- because its market value was too low.