Economics Letters 181 (2019) 178–181

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Economics Letters
journal homepage: www.elsevier.com/locate/ecolet

Blockchain hysteria: Adding ‘‘blockchain’’ to company’s name

∗
Archana Jain a , Chinmay Jain b ,
a
Saunders College of Business, Rochester Institute of Technology, Rochester, NY 14623, United States
b
Faculty of Business and IT, Ontario Tech University, Oshawa, Ontario L1H 7K4, Canada

highlights

• We identify a list of companies that changed their names to add ‘‘blockchain’’.

• These firms have a abnormal positive return for 2 months after name change.
• These positive returns turn negative 5 months after the change.
• These firms changed their names to take advantage of the price rise of bitcoin.
• Investors should research the underlying business of a company before investing.

article info a b s t r a c t

Article history: Using a list of companies that changed their names to add ‘‘blockchain’’ or ‘‘bitcoin’’ to their names, we
Received 24 March 2019 find that after changing the names, these firms have a significant abnormal positive return that lasts
Received in revised form 30 April 2019 for 2 months. The abnormal return turns negative 5 months after the change. This suggests that these
Accepted 4 May 2019
firms changed their names to take advantage of the hysteria surrounding the price rise of bitcoin.
Available online 15 May 2019
© 2019 Elsevier B.V. All rights reserved.
JEL classification:
G10
G14
G3

Keywords:
Blockchain
Bitcoin
Corporate name change
Abnormal return
Event study

1. Introduction
Blockchain is the technology behind Bitcoin and most of the
other cryptocurrencies such as Ethereum and Litecoin. It is essen-
tially a way to verify transactions in a decentralized manner with-
out the need of an intermediary. The exponential rise of bitcoin
and other cryptocurrencies helped in highlighting the potential
of blockchain technology to the public. Blockchain technology
is being considered as an innovation that will revolutionize the
way many industries such as banking and healthcare operate.
As with any new technology, we see miscreants that try to take
advantage of the hysteria to a financial advantage. During the
dot-com era, many companies chose to add ‘‘.com’’ to their name
to make their prices jump. Cooper et al. (2001) study the firms
that change their corporate name to Internet-related dotcom
∗ Corresponding author.
E-mail addresses: ajain@saunders.rit.edu (A. Jain), chinmay.jain@uoit.ca
(C. Jain).
names. They find that ‘‘dotcom’’ effect produces abnormal returns
of 74 percent for the 10 days following the announcement of
name change. Emshwiller (1999) gives examples of many firms
that added ‘‘.com’’ to their name and their stock prices shot up
afterwards. For example, MIS International traded for 50 cents a
share, and when it changed its’ name to cosmoz.com the price
hit $5 soon after. There were a few famous names that had
‘‘.com’’ in their name such as Amazon.com, but a lot of them were
largely unknown firms such as BoysToys.com, ecom ecom.com,
Millionaire.com, and FinancialWeb.com.
Several other studies have examined the impact of corporate
name change on the stock price. Lee (2001) also studies investor
reaction to firm announcements of name changes to include
‘‘.com’’. She shows that announcement of name changes are asso-
ciated with a stock price increase and increase in trading activity.
She further shows that these reactions are more pronounced for
firms for whom name change is accompanied by other strategic
investments.

https://doi.org/10.1016/j.econlet.2019.05.011
0165-1765/© 2019 Elsevier B.V. All rights reserved.
 A. Jain and C. Jain / Economics Letters 181 (2019) 178–181 179

Table 1
List of firms that change their name to include blockchain. We report the names of 10 firms that
changed their name to include the word blockchain in the name, their old name, and the date of
the name change or the date of announcement of the name change.
Name of company Old name Date of change/Date
of announcement
about change
First Bitcoin Capital Corp Grand Pacaraima Gold Corp 2/1/2014
Blockchain Mining Ltd. Natural Resource Holdings Ltd. 1/11/2018
Global Blockchain Technologies Corp. Carrus Capital Corporation 10/1/2017
Bitcoin services Inc Tulip BioMed, Inc. 3/1/2016
Hive Blockchain Technologies Leeta Gold Corp 9/15/2017
Long Blockchain Corp. Long Island Ice tea 12/19/2017
Online Blockchain Plc On-line Plc 10/26/2017
Riot Blockchain Bioptix Inc. 10/4/2017
Blockchain Power Trust Unit Transeastern Power Trust 12/21/2017
UBI Blockchain Internet Ltd. JA Energy 11/1/2016

In contrast, Cooper et al. (2005) study price reaction to name Table 2

changes during the internet bust period. They find that follow-
ing the crash of mid-2000, investors react positively to name
changes that accompany dot.com deletions. Dot.com deletions are
accompanied by a cumulative abnormal return of 64% during the
60 days surrounding the announcement of deletion. This study
further provides evidence that investors are affected by these
Correlation of the return of firms that changed name with other benchmarks
around event days. We report the correlation between the return of the firms
that changed their name with value-weighted return of firms that are part of
any blockchain ETF, with value-weighted return of CRSP universe, with returns
of S&P 500 index, and with return of bitcoin. We only look at observations
from 14 days before the announcement of name change to 120 days after the
announcement of name change.

cosmetic changes and managers time corporate changes to take
advantage of these biases.
We see a similar trend of name changes recently in 2016–2018
where firms added ‘‘blockchain’’ or ‘‘bitcoin’’ to their names and
in many cases, there was no direct connection between the firm’s
business activities and the blockchain technology. In January
2018, the SEC made a statement warning the investors about such
companies - ‘‘The SEC is looking closely at the disclosures of pub-
lic companies that shift their business models to capitalize on the
perceived promise of distributed ledger technology and whether
the disclosures comply with the securities laws, particularly in
the case of an offering’’.
We make a list of such firms that had a name change and
analyze their returns surrounding the name change. We also
make a list of companies that have business activities related to
blockchain technology by using the constituent list of 5
blockchain ETFs. Using 10 companies that have changed their
names to add ‘‘blockchain’’ in their name, we find that after
changing the names, these firms have a significant abnormal
positive return that lasts for 2 months, but turns negative for the
5 month period after the announcement.
2. Results
We look at all the companies that have changed their name
to include the word ‘‘Blockchain’’ or ‘‘bitcoin’’ in it. We use
web searches to find these companies for the period from 2014
to 2018. Then we look at the data for those companies on
finance.yahoo.com or OTC stocks database or CRSP database. We
keep only those companies for which we could find the data both
before and after the name change. We find 10 such companies.
We report the list of those companies, their old name, new name,
and date of name change in Table 1. The list includes firms such
as ‘‘Long Island Ice tea’’ that had a beverage business that was
completely unrelated to blockchain technology and changed its
name to Long Blockchain Corp.
We download return of S&P 500 index and value-weighted
returns of CRSP universe from CRSP. We also download return,
price, and shares outstanding of the firms that are part of any
blockchain ETF. We use constituents of BLOK, BLCN, LEGR, KOIN,
and BKC ETFs. We keep the firms that are part of any of those
ETFs and that have data available on CRSP. We find 95 such firms.
We calculated their value-weighed returns. We also download
historical prices of bitcoin-USD and calculate its return.
Return of firms
that changed name
Value-weighted returns of blockchain ETF constituents 0.0790**
CRSP value-weighted return 0.0663**
S&P 500 index return 0.0636*
Bitcoin return 0.0702**
*Significant at 0.10 level.
**Significant at 0.05 level.
We report the correlation between return of the firms that
have changed their name with value-weighted return of 95 firms
that are part of any blockchain ETF, with value-weighted return
of CRSP universe, with returns of S&P 500 index, and with return
of bitcoin. We report these correlations in Table 2. We only look
at observations surrounding day −14 to day +120. We find all
the four correlation coefficients to be positive and significant.
We exclude Hive Blockchain Technologies as an extreme outlier
because it had a return of 758% two days after the announcement
of name change.1 Returns of the firms that change their name
to include blockchain in it have a positive correlation of 0.0790
with value-weighted returns of the firms that are part of any
blockchain ETFs. Returns of the firms that change their name to
include blockchain in it have a positive correlation of 0.0702 with
the return of bitcoin.
Next, we look at the cumulative raw returns and cumulative
abnormal returns, around the name change, and we report these
results in Table 3. We also report the t-statistics for significance of
the mean of daily returns. In column 2, we report the cumulative
raw return for different event day lengths following Cooper et al.
(2001). We find that the firms that change their name to include
blockchain in it had a negative return of 13.55% from day −14 to
day −2. We see an increase in the return of these firms from day
0 to 1 at 34.29%. Over the five-day period from day −2 to day +2,
all firms earn a strongly statistically significant abnormal return
of 100.89 percent. Over a 30-day (60-day) period from +1 to +30
(+60), all firms earn a 81.47% (72.84%) percent return. However,
over a 60-day period from +61 to +120, all firms earn a −56.32
percent return.2 In column 3, we report the cumulative abnormal
1 The 99th percentile return for the days from −14 to +120 around the name
change for the 10 firms is 47%.
2 We exclude Hive Blockchain Technologies as an extreme outlier because
it has a return of 758% 2 days after the announcement of name change. Our
180 A. Jain and C. Jain / Economics Letters 181 (2019) 178–181

Table 3
Cumulative abnormal return of the firm that changed name around the announcement days. We report cumulative raw return and
cumulative abnormal return of the firms that changed their names. We report these returns from day −14 to day +120. We also
report the t-statistics for significance of mean of daily returns.
Cumulative Cumulative abnormal return by Cumulative abnormal return Cumulative abnormal
raw return Value-weighted returns of by CRSP value-weighted return by S&P 500 index
blockchain ETF constituents return return
−14 to −2 days −11.28% −12.59% −12.27% −12.15%
(−0.65) (−0.76) (−0.73) (−0.72)
0 to 1 days 29.24% 28.81% 29.04% 29.05%
(1.14) (1.13) (1.13) (1.13)
−2 to +2 days 272.07% 269.36% 270.79% 270.96%
(1.54) (1.53) (1.53) (1.53)
+2 to +15 days 162.08% 153.55% 157.22% 157.14%
(1.19) (1.16) (1.17) (1.17)
+1 to +30 days 285.00% 261.47% 276.67% 275.89%
(1.53) (1.47) (1.51) (1.51)
+1 to +60 days 276.20% 245.10% 262.37% 262.46%
(1.49) (1.41) (1.46) (1.46)
+61 to +120 days −54.65% −56.26% −54.72% −54.51%
(−2.24) (−2.32) (−2.22) (−2.21)

Fig. 1. Cumulative abnormal return of the firms that changed name around the announcement days. We plot cumulative raw return and cumulative abnormal return
of the firms that changed their names. We report these returns from day −14 to day +120.

return by value-weighted returns of blockchain ETF constituents.
In column 4, we report the cumulative abnormal return by CRSP
value-weighted return. In column 5, we report the cumulative
abnormal return by SP 500 index return. Thus our results indicate
that these firms had a positive abnormal return not because of
fundamental reasons but due to speculation caused by the name
change.
We also plot these raw and abnormal returns from day −14
to day +120 in Fig. 1. We find that these returns reach their high
around day 40 and then start moving downward around day 50.
Investors who buy these stocks preceding the announcement or
on the day of the announcement make significant positive re-
turns, but investors who follow the trend and buy in the following
days end up losing a significant amount of money in the following
months.
3. Conclusion
Using 10 companies that have changed their names to add
‘‘blockchain’’ in their name, we analyze the effect of this name
change on the return of these firms by computing abnormal
returns for these firms. We find that after changing the names,
these firms have a significant abnormal positive return that lasts
for 2 months, but turns negative for the 5 month period after
the announcement. Investors who buy these stocks on the days
shortly following the announcement end up losing a significant
amount of money. These results are in line with the SEC’s warning
in January 2018 to the investors when companies such as UBI
Blockchain (earlier ‘‘JA Energy’’) had their share prices skyrocket.
These findings should remind investors of the dot-com bubble
when firms were adding dot.com to their name to take advantage
of the internet bubble. Although, many such firms ceased to exist
after the dot-com bust, a few firms such as Amazon.com still
emerged as one of the winners of the dot-com era. Investors
would need to use their prudence when differentiating compa-
nies with real Blockchain business from companies that are taking
advantage of this hysteria.
References

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