Bakkt Faces Delisting Threat from NYSE Due to Low Stock Price
Bakkt, the cryptocurrency platform founded and majority-owned by the Intercontinental Exchange (ICE), is at risk of being delisted from the New York Stock Exchange (NYSE), which is also owned by ICE.
In a press release issued on Wednesday, Bakkt announced that it had received notification from NYSE stating that the company was not in compliance with Section 802.01C of the NYSE Listed Company Manual. The violation was due to the average closing price of Bakkt’s Class A Common Stock falling below $1.00 per share over a consecutive 30-day trading period as of March 12, 2024.
Bakkt shares closed at $0.5978 on Wednesday, resulting in a market capitalization of just $80 million. This is a significant drop compared to October 2021 when the stock was trading at $40 per share.
From Traditional Finance to Crypto
Bakkt was initially established as a response from traditional finance to crypto exchanges. Launched in 2019, the platform aimed to provide institutions with bitcoin custody and trading services. Although there were attempts to attract retail customers, this endeavor did not gain traction and Bakkt abandoned its retail operations last year.
Kelly Loeffler, the founding CEO of Bakkt, served as a U.S. senator from Georgia for one year between 2020 and 2021.
Hot Take: Bakkt’s Delisting Threat Raises Questions About Its Future
The recent threat of delisting from the NYSE has raised concerns about Bakkt’s future prospects in the cryptocurrency industry. Here are some key points to consider:
Stock Performance and Market Capitalization
- Bakkt’s stock price has plummeted from $40 per share in October 2021 to just $0.5978, resulting in a market capitalization of $80 million.
- This significant decline reflects the challenges Bakkt has faced in attracting retail customers and maintaining investor confidence.
Compliance Issues and Regulatory Scrutiny
- The delisting threat from NYSE is a result of Bakkt’s failure to meet the minimum stock price requirement outlined in the NYSE Listed Company Manual.
- This compliance issue raises questions about Bakkt’s ability to navigate regulatory requirements and maintain a strong foothold in the industry.
Retail vs. Institutional Focus
- Bakkt initially positioned itself as a platform for institutional investors, offering custody and trading services for bitcoin.
- However, the company’s attempt to attract retail customers did not succeed, leading to the abandonment of its retail operations.
- This shift in focus may have limited Bakkt’s growth potential and hindered its ability to compete with other crypto exchanges.
Leadership Changes and Political Connections
- Kelly Loeffler, Bakkt’s founding CEO, served as a U.S. senator for a brief period between 2020 and 2021.
- Loeffler’s political connections may have influenced Bakkt’s trajectory and decision-making processes during her tenure.
In conclusion, Bakkt’s delisting threat raises concerns about the company’s future viability. The significant drop in stock price, compliance issues, focus on institutional customers, and leadership changes all contribute to uncertainties surrounding Bakkt’s position in the cryptocurrency industry. Only time will tell if the company can overcome these challenges and regain its footing.
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