Find the best broker for your trading or investing needs One of the surest signs that the blockchain and cryptocurrency industries have reached a certain level of saturation in the minds of the public seems to be the phenomenon of the “blockchain” name. In recent months, some opportunistic companies rebranded themselves in the hopes of capitalizing on the blockchain craze.
In some cases, simply adding the word “blockchain” to the name of an existing (and non-blockchain-related) company had immediate and dramatic results, providing a quick boost to its stock price and fueling investor interest. Going forward, though, the U.S. Securities and Exchange Commission (SEC) will monitor these activities more closely, prohibiting companies from misleading potential investors and the public with a random, gimmicky name change.
Speaking at the Securities Regulation Institute this week, SEC Chairman Jay Clayton spoke pointedly about the blockchain name phenomenon. “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,” Clayton said.
A particular case stands out: a beverage company previously known as Long Island Iced Tea Corp. changed its name to Long Island Blockchain Corp., boosting its stock price sufficiently to avoid being dropped from the Nasdaq exchange in the process, according to Coin Telegraph. (See more: Long Island Iced Tea Soars 280% After Renaming Itself Long Blockchain.) Even this week, alongside Clayton’s remarks, at least one other company has made a similar name change.
The UK-based telecoms company, Stapleton Capital, became “Blockchain Worldwide,” in the process seeing its stock climb by 130%. This boost was short lived but not insignificant, as the end of Monday’s trading saw the gains at 45%. Read more from investopedia.com…
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