Blockchain ‘Name Game’ is Over: Hong Kong-Listed Blockchain Group Co. is Ordered to be Wound Up
As the prolonged crypto bear market dampens blockchain hype, companies which added ‘blockchain’ to its name during the historic 2017 bull market for bitcoin now are taking a beating.
Blockchain Group Company Limited, a Hong Kong-listed company, was formerly known as Ping Shan Tea Group Limited. It was quickly rewarded with a 1300 percent jump in stock price after rewriting its name to reference blockchain technology in November 2017. But on November 19, the company was wound up by the High Court of Hong Kong due to big deficits, and its shares have been halted from trading by Hong Kong Exchanges and Clearing, according to the announcement the company released on Nov 26.
The company, established in southern China’s Fujian province in 1988 and headquartered in Central, Hong Kong, began trading on the Hong Kong Stock Exchange in 2002. As the original name suggests, the company makes tea. It still focuses on the core business despite redefining itself as Blockchain Group Company Limited.
The craze associated with blockchain and cryptocurrencies in late 2017 and early 2018 drove the company’s stock price up an astonishing 1300 percent, trading at 0.168 Hong Kong dollar on Feb 13 after a half month’s trading halt.
In addition, Blockchain Group Company Limited also pivoted toward blockchain-related ventures in early 2018, in a bid to woo investors and get media attention. It announced a partnership with a third party service provider to develop a blockchain-based food tracking platform in March, and watched their share price soar another 14 percent. What’s more, the company sought to cooperate with well-known cryptocurrency firms both at home and abroad to further elevate its market cap in the first half of this year.
But this scheme fails to work in the bear market. Its blockchain related initiatives did not bring revenue nor reverse the decline in the company’s fortunes. According to the financial report, Blockchain Group Company Limited reported a loss of HK$146 million in 2017, with a HK$972 million loss for the same period a year earlier. During the first half of 2018, the company still saw HK$ 65.08 million in loss.
Since September 2017, the company has received a flow of winding-up petitions from creditors, and finally it was ordered to be wound by the High Court of Hong Kong and the trading in their shares remains suspended at press time.
Blockchain Group Company Limited is not the first and sorely company to try cashing in on the bitcoin craze but failed to turn the table. New Jersey-based Long Island Iced Tea Corp. changed its name to Long Blockchain Corp. during bitcoin’s bull run last year, seeing their shares soaring. But soon the Nasdaq stock exchange delisted their stock earlier this year because the company’s market cap was too low.