Bakkt Faces Delisting Risk from NYSE
Crypto custody and trading platform Bakkt has received a warning from the New York Stock Exchange (NYSE) regarding its non-compliance with listing rules. The platform’s closing share price has fallen below $1 for the past 30 days, putting it at risk of delisting.
Bakkt Aims to Address the Issue
In response to the warning, Bakkt has informed the NYSE of its plans to resolve the stock price discrepancy and meet the required listing standards. The company has a six-month window to increase its stock price and regain compliance.
- If Bakkt’s stock price rises above $1 per share and maintains this level for 30 consecutive trading days, the non-compliance will be resolved.
- Bakkt is exploring various options to tackle the issue, including a potential reverse stock split that would require shareholder approval.
Additionally, Bakkt has reported net losses for eight consecutive quarters and expressed concerns about its financial sustainability. In February, the company obtained regulatory approval to offer $150 million in new shares to raise capital and address its financial challenges.
Challenges Faced by Bakkt in the Market
Bakkt was established by Intercontinental Exchange (ICE), the parent company of NYSE, in 2018. The majority ownership stake in Bakkt is held by ICE. The platform made its debut on the NYSE in October 2021.
Initially, Bakkt positioned itself as a platform catering to institutional clients for crypto transactions, storage, and spending. It also introduced a retail-facing application but discontinued it in February 2023 due to low adoption and intense competition from other crypto exchanges.
Kelly Loeffler, the inaugural CEO of Bakkt, served as a U.S. senator from Georgia for one year, from 2020 to 2021.
Currently, Bakkt’s shares are valued at $0.5978, with a market capitalization of approximately $80 million. This is a significant decrease from its October 2021 valuation of $40 per share.
🔥 Hot Take: Bakkt Faces Uphill Battle for Compliance 🔥
Bakkt’s non-compliance with the NYSE listing rules poses a serious threat to its future as a publicly traded company. The platform must take swift action to address the stock price discrepancy and regain compliance within the given timeframe.
The challenges faced by Bakkt extend beyond its stock price. The company has reported consistent net losses and expressed concerns about its financial sustainability. This situation led to the approval of new shares issuance to raise capital and address the financial issues.
Furthermore, Bakkt’s pivot from a retail-facing application to focusing solely on institutional clients reflects the competitive nature of the crypto market. The discontinuation of the retail app indicates the need for a strategic approach in order to thrive in this industry.
As Bakkt explores various options, including a potential reverse stock split, it must prioritize shareholder approval and communication with the NYSE. The company’s future hinges on its ability to overcome these challenges and regain compliance with listing standards.
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