The iced tea company that pivoted to blockchain is selling 8.4 million of shares to buy bitcoin mining machines LTEAGet the Full StoryStephen Lam Getty Images
Dozens of companies, including the Long Island Iced Tea Corp., have boosted their stock price by announcing shifts to blockchain.
Now the firm says it will raise 8.4 million to purchase 1,000 bitcoin mining computers.
The Long Island Iced Tea Corp., which last month changed its name to Long Blockchain and saw its stock price quadruple, announced Friday it will sell 8.4 million worth of shares to finance the purchase of 1,000 bitcoin mining machines.
"Long Blockchain Corp. today announced the signing of subscription agreements for a public offering of 1,603,294 shares of its common stock at a public offering price of 5.25 per share," it said in a press release. The offering is expected to close on January 9, 2018.
The new shares are priced at a 17 discount from the 6.39 at which the stock was trading Friday morning.
The company said the proceeds will go towards purchasing 1,000 S9 Antminers, which sell online for 2,725 a piece. At that price, the company would be left with about 5.69 million in cash though it has not said what it will be used for. Long Blockchain did not immediately respond for comment.
Long Blockchain is just one example of a growing trend of companies, from poker machine makers to juice companies, that have dramatically increased their stock price by simply announcing a new focus on blockchain, fintech, or cryptocurrencies. The company's stock is still over triple its price before the announcement.
Analysis this week from Autonomous Research shows more than 31 companies have "pivoted" so far, and if the dot-com bubble of the late 1990s is any indication, that number could triple.
Since pivoting, Long Blockchain has added two new board members who appear to have knowledge of the fintech and the cryptocurrency space, Long Island's local newspaper reported. Shamyl Malik, global head of trading at Voltaire Capital, and Som Ghosh, co-founder of United Kingdom health startup Earthmiles, will bring "over 11 years of experience in technology and computing, with its applications in ... algorithmic trading and cryptocurrency," to the firm, it said.
Shares of LTEA are down 5.71 in trading Friday morning, according to Markets Insider data.
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