In brief
- Chinese tea company Urban Tea is investing in a Bitcoin biz.
- It isn't the first tea company to do this.
- Its predecessor, Long Island Iced Tea Corp, ended in disaster.
The tea trade was never really about tea, anyway. And continuing in this age-old tradition of expedition and expansion is Urban Tea, a publicly traded baked goods and tea company based in Hunan, China, that’s getting into crypto mining. And it wouldn’t be the first.
Urban Tea today installed as Chief Operating Officer Fendgan Zhou and as independent director Dr. Yunfei Song to “lead and support the Company's critical strategic expansion in blockchain and cryptocurrency mining.”
Zhou comes from “blockchain data center companies” in Hong Kong and Singapore, according to a press release, and Song is a scientist at the Chinese Academy of Sciences with experience in crypto mining and trading. Zhou will lead Urban Tea’s “blockchain and bitcoin business plan,” according to the firm.
Urban Tea’s CEO, Yi Long, said in a statement that his company’s burgeoning crypto mining biz comes as “blockchain technology and cryptocurrency are gaining widespread popularity.” Indeed, Bitcoin hit $50,000 for the first time just this week.
The crypto switch is an uncharacteristic move for Urban Tea. The company, founded in 2011 and with a market cap of $45 million, has focused on tea since it sold off its “chemicals business” in April 2019. Since then, it’s bought controlling stakes in a brand management company and a tea supply chain management company, and opened stores in New York.
And now, out of nowhere, blockchain and Bitcoin mining.
“Going forward,” said Yi, “we expect Urban Tea will start expanding into blockchain ecology, such as cryptocurrency mining, blockchain mine construction and maintenance, and cryptocurrency exchange operations."
Bold utterances, but Urban Tea would not be the first tea company to trundle down this path. Long Island Tea Corp, a lemonade and non-alcoholic iced-tea company, rebranded as Long Blockchain Corp in December 2017, just as Bitcoin hit close to $20,000.
Announcing the rebrand, Long Blockchain Corp said it was investing in “opportunities that leverage the benefits of blockchain technology.
Around the time of the announcement, the company was desperately trying to keep its stock listed on public trading markets, facing off threats by Nasdaq. Shortly after its crypto announcement, its stock pumped by 500%.
But as the crypto bubble popped, so did Long Blockchain’s mining ambitions. By February 2018, when Bitcoin’s price crashed, Long Blockchain scrapped its plans to buy crypto miners. By April, Nasdaq wiped it from traders’ screens and Long Blockchain had to sell off its tea business.
Since then, the company has been investigated by the FBI and the SEC over allegations of insider trading. The investigators thought that Long Blockchain was a pump and dump scheme: pump a low-cap stock to high heaven and cash out before the hype train hurtles toward hell.
Still, during the bull run, Long Blockchain’s stock has increased tenfold.
Urban Tea (MYT) today closed trading up 15% following news of its Bitcoin plans.