Bakkt Considers a Potential Sale Amid Financial Struggles: Report

Bakkt, a prominent crypto platform launched by Intercontinental Exchange, the parent company of the New York Stock Exchange (NYSE), is reportedly evaluating a range of strategic options, including a potential sale or breaking up the company into smaller entities. 

According to insiders who spoke with Bloomberg, the board is also contemplating the possibility of maintaining Bakkt’s current structure and operations without pursuing a sale or breakup.

Bakkt Faces Significant Challenges

This news comes amid a series of high-profile acquisitions and takeover offers within the cryptocurrency sector. Notably, Robinhood recently acquired the Bitstamp exchange, and Coreweave made an unsolicited offer to buy out Bitcoin miner Core Scientific. These movements reflect the dynamic and rapidly evolving nature of the crypto industry.

Bakkt has faced significant challenges in the market, most notably its poor stock performance. The company’s share price has plummeted from a high of $59.57 at the start of 2024 to approximately $19 at the time of writing. This sharp decline has raised concerns among investors and industry observers about the firm’s financial health and long-term viability.

Low on Cash

In February 2024, Bakkt revealed it was running low on cash and warned that it might not be able to sustain its business operations. In response, the company sought regulatory approval to raise $150 million in capital. U.S. regulators subsequently approved Bakkt’s plan to raise funds through a $150 million securities sale to investors, providing a much-needed lifeline for the struggling firm.

Following the approval and capital infusion, Andy Main, Bakkt’s CEO and president, issued a statement asserting that the company had bolstered its balance sheet and was no longer at risk of closure. Main highlighted Bakkt’s 2023 revenue of $780 million as a positive indicator of the company’s turnaround. However, a closer examination of Bakkt’s financial performance paints a more complex picture.

Eight Quarters of Losses

Since its listing on stock exchanges in 2021, Bakkt has endured eight consecutive quarters of losses. The company’s stock price has steadily declined since its debut, reflecting ongoing challenges and market skepticism about its future prospects. Despite these setbacks, Main remains optimistic about Bakkt’s potential for recovery and growth.

Looking ahead, Main projects that Bakkt could generate revenues ranging from $3.2 billion to $5 billion in 2024. Achieving these ambitious targets would enable the company to break even for the first time since its inception. Main’s optimism is based on a strengthened balance sheet and new operational initiatives aimed at driving revenue growth and improving financial stability.

Bakkt Considering a Potential Sale

The potential sale or restructuring of Bakkt underscores the broader pressures facing many companies in the cryptocurrency sector. Volatile market conditions, regulatory uncertainties, and intense competition are prompting firms to reassess their strategies and explore various paths to sustainability and profitability.