Bakkt Mulls Sale or Split Amidst Struggling Market Performance, Despite CEO's Positive Revenue Forecast
Summary:
Bakkt, the crypto platform established by the parent company of the NYSE, is reportedly evaluating a potential sale or split into smaller units amidst underwhelming market performance. This follows other major crypto business moves, including Robinhood's Bitstamp exchange acquisition. Bakkt's share price has seen a significant drop, leading the company to raise $150 million in capital in 2024 to maintain operations. Despite consecutive quarters of loss and a declining stock price, Bakkt's CEO projects revenues in the billions for 2024.
Bakkt, the cryptocurrency platform initiated by the Intercontinental Exchange, the parent company of the New York Stock Exchange (NYSE), is potentially contemplating the divestment of its business division or disbanding into smaller units, according to sources in communication with Bloomberg. The board may also opt for status quo, retaining the existing corporate structure and foregoing a divestiture or division. This news follows a string of noteworthy acquisitions and takeovers within the cryptocurrency sphere, including Robinhood's acquisition of the Bitstamp exchange and Coreweave's unsolicited proposal to purchase Bitcoin miner Core Scientific.
The company, Bakkt, has been grappling with underwhelming stock market performance. Its shares plummeted from the 2024 high of $59.57 to somewhere around $19 at present. The company in February 2024 admitted to a cash crunch and cautioned that sustaining its operations would be challenging. In response, Bakkt sought regulatory approval to raise $150 million in capital.
Shortly after the request for capital, American regulators granted permission to Bakkt to generate capital via a securities sale to investors amounting to $150 million. In the subsequent month, Bakkt's CEO and President, Andy Main, announced the company had strengthened its financials and thereby steered clear of the shutdown risk.
Andy Main, Bakkt's President and CEO, emphasized the robust revenues of $780 million in 2023 to vindicate his belief that the company's financial health had improved. A closer examination of Bakkt's price history and financial records indicates otherwise. TradingView's charts show a consistent decline in Bakkt's stock price post its 2021 listing, along with eight successive quarters of losses.
Despite the setbacks, the CEO of Bakkt, Andy Main, remains hopeful and forecasts revenues in the billions for 2024. By his estimates, Bakkt's fortified financials and operational expansions could potentially generate revenues ranging from $3.2 billion to $5 billion in 2024. These speculation figures, if realized, would enable Bakkt to break even in the same year.
Published At
6/8/2024 1:04:16 AM
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