Key Takeaways
- NYSE issued a warning to Bakkt after its average closing share price remained under $1 for the past 30 days
- Bakkt has a six-month window to rectify the situation, during which it can regain compliance if its share price reaches $1 on the last trading day of any calendar month
Bakkt, the crypto custody and trading platform, is facing a potential delisting from the New York Stock Exchange (NYSE) due to its share prices dipping below $1. The NYSE issued a warning to Bakkt after its average closing share price remained under $1 for the past 30 days, falling to 60 cents at the close of trading on March 13. This marks a significant decline from its peak of over $40 in late October 2021.
The platform, which is majority-owned by Intercontinental Exchange (ICE), received notice from the NYSE that it’s not in compliance with the exchange’s listing rules. According to the NYSE Listed Company Manual, Bakkt’s average closing price of its Class A Common Stock fell below $1 per share over a consecutive 30-day trading period.
Bakkt expressed its intention to address the stock price deficiency and regain compliance with the NYSE standards. One potential solution it’s considering, pending shareholder approval, is a reverse stock split. This strategy involves combining existing shares to increase their price per share.
The company has a six-month window to rectify the situation, during which it can regain compliance if its share price reaches $1 on the last trading day of any calendar month within the cure period and maintains an average share price of at least $1 over the 30 trading-day period leading up to the last trading day of that month.
Originally positioned as a platform for institutions to engage in crypto transactions, Bakkt’s journey has been tumultuous.Despite attempts to pivot its focus to crypto custody and trading services, Bakkt has faced financial challenges, reporting losses in eight consecutive quarters since its listing.
To address its financial woes, Bakkt recently obtained regulatory approval to issue $150 million in new shares. However, the company cautioned in February that it might not have enough cash to sustain its operations over the next year. In a filing with the U.S. Securities and Exchange Commission (SEC), Bakkt expressed uncertainty about its ability to continue as a going concern due to insufficient funds.
