Key Takeaways
- Bakkt has announced plans to sell up to $150 million of securities
- Bakkt filed an amendment to its quarterly report with the SEC with a warning that it may “not be able to continue as a going concern.”
Bakkt, a publicly-traded crypto company is facing financial challenges that cast doubt on its ability to sustain operations for the next 12 months. The company’s precarious financial situation was disclosed in a filing with the U.S. Securities and Exchange Commission (SEC), where Bakkt expressed concerns about its cash reserves being insufficient to fund its activities beyond the next year.
Established by the Intercontinental Exchange (ICE) in 2018, Bakkt initially aimed to facilitate crypto payments for major corporations like Starbucks. However, despite early promise, Bakkt has encountered setbacks along the way. Despite its ownership by ICE, which holds a 68% stake in the company, Bakkt is struggling to maintain financial stability.
In response to its cash flow challenges, Bakkt has announced plans to sell up to $150 million of securities, a move aimed at alleviating its financial strain. This fundraising initiative comes as Bakkt seeks to address its immediate liquidity concerns and stabilize its operations.
The company’s journey has been marked by both successes and setbacks. While Bakkt initially gained traction by enabling businesses to accept crypto payments, its foray into the consumer market with a digital wallet in 2021 was short-lived. Bakkt subsequently decided to discontinue its wallet service in February 2023, opting to focus on business-to-business solutions instead.
Despite this strategic shift, Bakkt continues to face financial headwinds, as evidenced by its recent filing with the SEC. The company acknowledges the uncertainty surrounding its expansion efforts and revenue growth, particularly in the rapidly evolving crypto landscape.
Additionally, a now-deleted post on X revealed that Bakkt had submitted an S-3 form, which, if approved, would enable the company to sell up to $150 million in equity. “We will retain broad discretion over the use of the net proceeds to us from the sale of our securities,” the firm noted. It further added that it expects to use the net proceeds that it receives from the offering for working capital and other general corporate purposes.”
