NYSE Warns Crypto Firm Bakkt of Potential Delisting Amid Falling Share Prices
Summary:
The New York Stock Exchange (NYSE) has notified cryptocurrency platform Bakkt of a potential delisting unless it raises its average closing share price to over $1. The company's shares have fallen 42% over the past month, closing most recently at 60 cents. Bakkt is considering a reverse stock split to increase its share price, subject to shareholder approval. The company, which has reported net losses for eight consecutive quarters, was also recently approved to offer $150 million in new shares to raise capital.
The New York Stock Exchange (NYSE) has issued a warning to Bakkt, a firm specializing in the custody and trading of digital currencies, that its shares could be removed from listing if it fails to restore its average closing share price to a minimum of $1. This information was relayed in a company press release on March 13, detailing that the NYSE had notified Bakkt of the non-compliance due to an average closing share price of less than $1 over the previous 30-day trading period. Bakkt's shares ended on March 13 at 60 cents, marking a 2.8% daily rise but still representing a 42% drop over the month from over $1. Interestingly, Google Finance data reveals that the company once traded at over $40 per share in October 2021. Bakkt encountered its last above-$1 trading day on February 28 before experiencing a pronounced drop the following day. The company is determined to rectify the stock price issue and comply with NYSE regulations, contemplating a reverse stock split, subject to shareholder approval. The strategy involves merging existing shares to increase their value. Bakkt has a six-month window to remedy the situation, during which it can regain compliance if it achieves a $1 share price on the final trading day of any given month within the specified period and maintains an average share price of at least $1 throughout the 30 trading days leading up to this final trading day. Intercontinental Exchange (ICE), the firm behind the creation of Bakkt in 2018 and its principal owner, also controls the NYSE. Bakkt, which went public on the NYSE in October 2021, offers services for institutions to purchase, sell, store, and utilize digital currencies. Despite these offerings, its promising retail app was discontinued in February 2023 due to lack of traction amidst a plethora of competing cryptocurrency exchanges. Since going public, Bakkt has posted a sustained sequence of net losses over eight consecutive quarters. A warning was issued in early February that the company may run out of cash within a year. On a positive note, Bakkt secured regulatory endorsement on February 14 to offer $150 million in new shares as part of its strategy to generate funds.
Published At
3/14/2024 3:01:10 AM
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