The mention in the name of a technology company, which is at the peak of popularity, is an old technique that at different times allowed companies to attract the attention of the market. In the second half of the 90s, "in vogue" was renaming using the Internet, ".net" and ". om". The current trend is blockchain and cryptocurrency.
Everyone wanted to be in trend
“Blockchain” in the title does not always indicate a tech start-up. From December 2017 to January 2018, statements on rebranding and launching a new direction allowed companies, which were not related to IT, to
sharply increase their capitalization . Then the cryptocurrency market was at its peak.
Blockchain-turn as a source of rapid growth
When in December 2017 the tobacco company Rich Cigars Inc. became Intercontinental Technology, Inc. and said it plans to mine, quotes for its shares
increased by 2233% . The same turn was made by several companies from the field of medicine, construction, food and light industry.
Explosive effect: growth followed a decline
Experts Bloomberg
note that the positive effect of the announced change of course may not last long. As an example, the aforementioned Rich Cigars Corporation, Chanticleer Holdings, THC Therapeutics, which became the Millennium Blockchain inc. and Sycamore entertainment group. Their market capitalization has significantly decreased already in the first 2 weeks after the jump, caused by reports about the start of blockchain technology.
"Technological" renaming in the medium term
Now the value of the shares of "tobacco" Intercontinental Technology is not much higher than the one that was before the change of name, and the shares of Millennium Blockchain, previously engaged in the processing of medicinal herbs, fell below the initial value.
For a stable capitalization is not enough to have a beautiful name.
For Long Blockchain Corp., which re-naming was widely reported in the media in December 2017, the situation turned out to be more dramatic: on June 6, Nasdaq
reported that it was discontinuing trade in shares of this company. Initially, trading was suspended back in April, when, against the background of Bitcoin decline, Long Blockchain shares fell almost 7 times.
Unverified promises can be a problem.
Nasdaq argues that the company previously engaged in the production of cold tea, reporting on planned research in the field of blockchain, has abused investors' interest in this technology. It is worth noting that most of the companies that received growth due to the announcement of new directions disappeared from February from the information field and did not report on the progress of their blockchain projects.
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