Bakkt to Raise $150M Amid Financial Difficulties, Secures Regulatory Approval for Shelf Registration
Summary:
Cryptocurrency platform Bakkt has secured regulatory permission to raise up to $150 million via securities sales after expressing financial difficulties. The authorization, known as a "shelf registration", allows the company to register new securities that can be gradually sold, negating the need for separate permissions each time. Bakkt has experienced eight consecutive quarters of net losses since October 2021 and the company plans to leverage these offerings to augment capital, provide financial flexibility and propel its long-term vision.
Financially-strapped cryptocurrency organization Bakkt has announced that it has secured regulatory permission to amass up to $150 million through securities sales. This news arrives a week after the institution expressed anxiety over its financial state. On the 14th of February, it confirmed that it had been granted approval for a "shelf registration"—a process where a business registers a new securities issuance that can be methodically sold over a stretch of time with the Securities and Exchange Commission, eliminating the need for individual permissions each time. Defining the approval as an asset, Bakkt shares its plans to augment $150 million capital via one or several offerings in a span of three years.
In the past week, Bakkt—a cryptocurrency custody and trading platform that was once seen as Bitcoin’s rescuer amid the 2018 bear market—made it known that it was in financial difficulties. It was suggested that the organization might have to cease operations. At the time, Bakkt aired its intentions to possibly accumulate extra capital by making its registered securities accessible to the public market, assisting in realizing its far-reaching vision. After it launched its Initial Public Offering in October 2021, the corporation's financial reports have always shown net losses across the next eight quarters.
Despite hopes of a rebound in the cryptocurrency market, analyses show that the organization suffered losses of $44.9 million, $50.5 million, and $51.7 million over the first three quarters of 2023. 2023 did witness a decrease in losses, an improvement when compared to shattering losses of $1.59 billion and $323.9 million sustained in the third and fourth quarters of 2022. Since the final quarter of 2021, the corporation documented net losses aggregating up to $2.26 billion.
Founded by the Intercontinental Exchange—a US-based organization that owns the New York Stock Exchange—in 2018, Bakkt governs a digital asset exchange forum for institutions and has successfully established several tactical collaborations with companies like Starbucks and Amazon Web Services, thereby facilitating digital asset transactions and services.
Prior to the announcement, the share price of Bakkt (BKKT) surged by 7.8% to $1.03, as per Google Finance. However, it has slumped by over 51% since the onset of 2024.
BKKT’s share price had reached a peak of $42 on the 29th of October, 2021, but then it drastically dropped to $3.61 in the ensuing January, marking the beginning of a steady downward trend.
Published At
2/15/2024 7:36:03 AM
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