Cryptocurrency firm Bakkt, facing financial constraints, has announced regulatory approval to raise up to $150 million through the sale of its securities. This approval, granted for a "shelf registration," enables Bakkt to gradually register new offerings with the U.S. Securities and Exchange Commission (SEC) over a three-year period without needing separate approval each time. With this flexibility provided by the Form S-3 listing, Bakkt anticipates significant benefits in its future capital-raising endeavors.
Initially hailed as Bitcoin's potential savior during the 2018 bear market, Bakkt, a cryptocurrency custody and trading platform, disclosed its financial struggles on February 7, expressing concerns about its balance sheet and its ability to sustain operations. In response, Bakkt announced plans to seek additional capital through a public market offering of registered securities to support its long-term vision.
Since its public debut in October 2021, Bakkt has reported net losses for eight consecutive quarters. Despite the cryptocurrency market's recovery from a challenging 2022, Bakkt incurred substantial losses of $44.9 million, $50.5 million, and $51.7 million in the first three quarters of 2023, respectively, as per company financial data.
However, the company saw a narrowing of net losses in 2023 following significant losses reported in the third and fourth quarters of 2022. Since the fourth quarter of 2021, Bakkt has accumulated a net loss of $2.26 billion. Despite its financial struggles, Bakkt operates a digital asset trading platform catering to institutions and has forged strategic partnerships with industry giants like Starbucks and Amazon Web Services to facilitate digital asset trading and services.
Founded in 2018 by Intercontinental Exchange, the company behind the New York Stock Exchange, Bakkt's announcement of regulatory approval buoyed investor sentiment, with its shares rising 7.8% to $1.03 before the news surfaced, as reported by Google Finance. However, despite this temporary boost, Bakkt shares are projected to decline by more than 51% by 2024.
