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Bakkt Holdings considers breakup amid financial challenges
Bakkt Holdings Inc., the digital asset marketplace launched by the New York Stock Exchange (NYSE) company, is reportedly considering a possible split. No final decision has been reached and Bakkt may choose to remain independent.
Founded with the backing of Intercontinental Exchange Inc. in 2018, Bakkt has faced challenges in recent times, including risk of delisting earlier this year due to concerns about its financial sustainability. The company went public through a merger in 2021 and reported a first-quarter loss of $21 million on revenue of $885 million.
Bakkt had a liquidity problem due to which required regulation approval to sell $150 million worth of securities. After obtaining approval from the relevant regulatory authorities, the company arranged the financing and the CEO, Andy Main, consolidated the balance sheet.
However, Bakkt has not given up on financial gains as it recently forecast interim revenues. The $2 billion to $5 billion range for 2024 could allow the company to be valued free of net operating losses.
At the time of writing, Bakkt Holdings is trading at $19.50 down more than 2% on the daily chart.
Bakkt holdings chart: Tradingview
Bakkt potential the sale is part of a consolidation in the cryptocurrency industry. Competitors such as Robinhood and Riot Platforms Inc. have been actively expanding through acquisitions, aiming to take advantage of the recovery in cryptocurrency prices. Bakkt, which holds the coveted New York State Department of Financial Services BitLicense, faces competition from established players.
Read also: HKMA warns public about unregulated crypto scam “Kucoin”.