An iced tea manufacturer turned blockchain advocate has canceled its order for 1000 AntMiner S9 bitcoin mining rigs. Long Blockchain, formerly known as Long Island Iced Tea, maintains its commitment to blockchain technology, but its next steps are less clear.
The newcomer to commercial bitcoin mining is better known for its earlier iced tea products, sold under the name of Long Island Iced Tea, like the popular cocktail. Upon finalizing its name change, Long Blockchain's stock price doubled almost immediately. The company's stock price has since dropped back to its previous levels.
Although Long Blockchain made their plans to buy the mining equipment public, it was never clear whether the Antminers would be coming directly from Bitmain or from a third-party reseller. What was clear was that the total purchase would amount to $4.2 million, with some of that total being paid in company stock.
Long Blockchain - True Believer or Riding The Hype?
Naturally, there's plenty of speculation in the stock world that the financing deal fell through. Crypto investors are less trusting, so a lot of people also see this as a sign that Long Blockchain was a gimmick company whose plans will never come to pass. The reversal of their announced mining plans will not do any favors for the company's market cap. The stock price is in a slow dive, and trading volume is dropping off to the point that NASDAQ may stop listing it.
Long Blockchain maintains in its SEC filing on the canceled order that it remains committed to blockchain technology.
"We will continue to evaluate the purchase of mining equipment for Bitcoin and other digital currencies as part of our larger blockchain initiative"
Canceled ASIC Order Probably Marks The End
Personally, I see this as lip service to mining and nothing more. We won't hear anything more about mining equipment from them, certainly not for a while. The recent drop in BTC prices was likely the final nail in the coffin for Long Blockchain's mining initiative. The assumptions for those mining projections are no longer looking so rosy.
The company is much more likely to complete its merger with Stater Blockchain (then never be heard from again). They announced as much in the SEC filing, and it looks like just about all that remains is to file the papers. Long Blockchain stock hodlers may end up getting a payout in the end, but more and more this company's rebirth is looking like a whitepaper with no follow-up.