The Blockchain Pivot Effect: Quick Cash For Non-Blockchain Businesses

4. January 2018.








In what was one of the most dramatic representations of the blockchain hype in 2017, a cigar company based in Florida reportedly ditched cigars entirely to operate in cryptocurrency mining. It’s a dramatic turnaround for the firm, Rich Cigars — which rebranded as Intercontinental Technology, Inc. — but the business model pivot led to a more than 2,000 percent spike in the company’s share value after it made the announcement.

Intercontinental Technology, Inc. is hardly the first business to respond to the cryptocurrency hype, and 2018 is already proving it won’t be the last.

With analysts anticipating blockchain to be a key disruptor — and major money-maker — in the new year, business owners are realizing the innovation could be their ticket to fast cash.

“Historically, stalled companies sought a sympathetic acquirer or quietly shut down. Now, startups have a new potential lifeline: They pivot to blockchain,” wrote Wired in an article released Wednesday (Jan. 3).

The publication mentioned restaurant chain Hooters, whose share value spiked by nearly 50 percent when the company merely mentioned the word “blockchain.”

But blockchain experts say this trend could quickly go downhill for some.

“If you have a business and a business model and you’re trying to figure out how to put a token in it, that’s the wrong way to think about it,” said Ripple CEO Brad Garlinghouse in an interview with Wired. “If there is a usefulness of a token and it has a utility, then people are going to demand a usage for that. But don’t retrofit your business to try to offer a token to raise capital because the traditional capital markets are not interested in what you are doing.”

In this week’s Blockchain Tracker, PYMNTS takes a look at the recent blockchain pivots of several other businesses, from commerce to solar energy.


The restaurant chain isn’t really stepping into the world of blockchain innovation, but the company certainly benefited, at least temporarily, from merely mentioning the term in a recent press release, as Wired reported. Separate reports in Fortune this week said Hooters’ parent company Chanticleer announced plans to provide customers with cryptocurrency in return for eating at its restaurants.

“Eating a burger is now a way to mine for cryptocoins!” the company stated, adding that it will deploy the blockchain-based loyalty program operated by Mobivity for its new service. Customers will earn the cryptocurrency Merit, reports said.

Hooters stock hit a valuation of nearly $12 million following the press release, according to reports.

Riot Blockchain

Despite its name, this company was founded in the area of biotech. The firm started out as BiOptix but, last October, the company changed its name. The addition of “Blockchain” in its new title sent share prices soaring, reports said.

According to CNBC, stocks spiked by 648 percent between the end of September and Dec. 19. Its market value increased to nearly $270 million. Reports this week said the company’s CEO and Chairman, John O’Rourke, disclosed that he sold off more than 30,000 shares at $28.61 each. CNBC said that O’Rourke made at least $712,000 from the payout as a direct result of the company’s name change.

The company’s name change represented its decision to pivot from biotech to blockchain-related investments, the publication explained. The company has so far invested in three blockchain companies.

Overstock may be an example of a more reasonable approach to the business model pivot toward blockchain. Reports in Markets Insider on Wednesday (Jan. 3) said analysts agree Overstock is the “clear leader” of the blockchain pivot since its announcement that it would accept bitcoin as payment and issue blockchain-based stock.

“Our research increased our conviction that, today and likely in the near-term, Overstock stands head and shoulders above the others when it comes to having developed a portfolio of companies with significant efforts to exploit blockchain technology,” said D.A. Davidson Analyst Tom Forte.

The company’s stock increased 265 percent in the last year, analysts noted, with Forte forecasting share prices could go as high as $85. Overstock shares opened at $65 on Wednesday.

Long Blockchain

This company was once known as Long Island Iced Tea Corp. Its rebranding to Long Blockchain Corp. led to a 300 percent surge in shares, according to news in late December. While the company plans to continue operating in the beverage space, its decision to also step into the world of blockchain increased the company’s value from $23.8 million to $92 million as of Dec. 20.

TGI Solar

Reports in Bloomberg Technology dubbed this firm a “no-name solar” business, but on Tuesday (Jan. 2), the company saw shares spike by 233 percent. The reason? Blockchain, of course, when TGI Solar announced it would enter the “blockchain and crypto hot commodity market.”

The share price increase was more than triple its value before the announcement, closing at 0.1 cent.

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