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Nasdaq Believes Publicly-Traded Long Blockchain Misled Investors

Long Blockchain is appealing a delisting decision from stock exchange operator Nasdaq which, according to a letter, believes the publicly-traded company misled its investors.

In a Feb. 21 letter, Long Blockchain – one of a number of firms with public securities to ride the recent wave of investor hype around blockchain – wrote that Nasdaq ” had determined to delist the Company’s securities.” The reason: Nasdaq, according to the note, is crying foul in light of recent statements issued by the company.

“The notification letter stated that the Staff believed that the Company made a series of public statements designed to mislead investors and to take advantage of general investor interest in bitcoin and blockchain technology, thereby raising concerns about the Company’s suitability for exchange listing,” the firm wrote, going on to add:

“The Company strongly disagrees with the Staff’s determination and, accordingly, has appealed to a Hearings Panel. As a result, the Staff’s notification has no effect at this time on the listing of the Company’s common stock, and the stock will continue to trade uninterrupted under the symbol ‘LBCC.'”

However, the company remains out of compliance with Nasdaq’s rules for market value requirements, and so even if it wins the appeal, it runs the risk of being delisted anyway, as previously reported.

To maintain its listing, Long Blockchain’s market cap must remain at or above $35 million for at least 10 consecutive business days, though a note on the most recent SEC filing states that Nasdaq can extend this time period up to 20 consecutive business days. The company has until April 9 to maintain this level.

As of press time, Long Blockchain’s market cap remained around $31.6 million, according to data from Nasdaq, down some $2 million from earlier in the week. At its height, the price of the company’s stock rose to nearly $7 – as of today, it’s hovering around $3.

The public filing comes just days after the company announced Shamyl Malik, a board member, was taking over as the company’s chief executive after former CEO Philip Thomas stepped down.

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Long Blockchain Is At Risk for Exchange Removal Again

Long Blockchain, the beverage company-turned-crypto-firm, is facing a delisting from the Nasdaq stock exchange, public records show.

The reason lies in Long Blockchain’s sliding stock price, which rose to nearly $7 in December after a strong market response following its crypto-pivot. Now trading below $4, the company’s press-time market capitalization of $33.01 million (per data from Google) means that it runs afoul of Nasdaq’s rules requiring that a listed firm’s  market capitalization remain above $35 million for ten business days in a row.

In a filing with the U.S. Securities and Exchange Commission (SEC) dated Feb. 15, Long Blockchain announced it would appeal the move by Feb. 22. If it is successful, the company has until April 9 to maintain a market value of $35 million.

“On February 15, 2018, Long Blockchain Corp. (the “Company“) received a notice from the Listing Qualifications Department of The Nasdaq Stock Market (“Nasdaq“) stating that Nasdaq had determined to delist the Company’s securities under the discretionary authority granted to Nasdaq pursuant to Nasdaq Rule 5101,” the firm wrote.

How that process will play out remains to be seen.

The company had already been warned of a possible delisting in October, a move that came just over two months prior to announcing its pivot and accompanying name change.

In the time since the shift toward blockchain, the company has announced and canceled a plan to purchase 1,000 bitcoin miners. In order to fund its purchase, the company also announced a stock sale to raise $4.2 million over a nearly four-week period. This sale was called off a week later, but it remains unclear how much the company raised.

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The leader in blockchain news, CoinDesk is an independent media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. Have breaking news or a story tip to send to our journalists? Contact us at news@coindesk.com.