Financial Struggles and Regulatory Uncertainty
Bakkt filed a Form 10-Q/A with the SEC on Feb 7, outlining the financial difficulties the company is facing. Bakkt expressed doubts about its ability to continue operations due to financial constraints, stating, “We might not be able to continue as a going concern.” Initially launched in 2018, Bakkt aimed to facilitate Bitcoin transactions for mainstream consumers. However, the company later shifted its focus to providing business-to-business (B2B) technology services, such as crypto trading and custody solutions for financial institutions and fintech companies.
Uncertainty and Capital-Raising Efforts
Despite its strategic realignment, Bakkt’s journey has been full of challenges, with shares trading significantly below their peak value of over $40 following the company’s public listing in 2021. Bakkt’s SEC filing warns investors of its uncertainty, and the company has announced that it is doubtful that its cash and restricted cash are enough to cover its expenses for the next 12 months.
The firm said, “There is significant uncertainty associated with our expansion to new markets and the growth of our revenue base given the rapidly evolving environment associated with crypto assets.”
Bakkt aims to raise to $150 million through the issuance of registered securities in public markets. The proceeds from this offering would be utilized for working capital and general corporate purposes.
Hot Take
The uncertainty of Bakkt highlights the challenges posed by the rapidly evolving regulatory environment and market dynamics.
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