Live Markets: Bakkt recovers poise after brutal sell-off

Bakkt

15/08/2024 16:06

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    BAKKT RECOVERS POISE AFTER BRUTAL SELL-OFF
    Bakkt Holdings  BKKT.N , a crypto trading and custody
platform born out of NYSE-owner Intercontinental Exchange
 ICE.N , reclaimed some ground on Thursday after a tepid revenue
forecast knocked $42 million off its market value a day before. 
   
    The company's shares rose 12% to $13.55 after declining
about 21% on Wednesday. Brokerage Jefferies bumped up its price
target on the stock by $2, but its new target of $13 is still
below where the stock is trading. 
    Concerns over its business model have driven a massive
sell-off in Bakkt's shares, dampening the hype around what was
to be the poster child of ICE's expansion in the digital asset
space when it launched in 2018.
    Alpharetta, Georgia-based Bakkt promised to be a platform
that would allow "consumers and institutions to buy, sell, store
and spend digital assets on a seamless global network."
     It partnered with consulting firm BCG, tech giant Microsoft
 MSFT.O  and coffee chain Starbucks  SBUX.O  while being led by
Kelly Loeffler, who later went on to be a Senator from Georgia. 
    A $2.1 billion merger with a special purpose acquisition
company during the accommodative monetary policy era of 2021
seemed to boost its prospects, but the company has since
struggled to find its footing.
    Its former parent company, ICE, wrote down the value of its
Bakkt investment by $1.1 billion in 2022. 
    NYSE, the exchange on which Bakkt is listed, also warned it
of a potential delisting earlier this year because its shares
had closed below the minimum price for 30 consecutive trading
days.
    On Wednesday, the company suffered another hit after it
lowered its forecast for 2024 revenue despite optimism in the
broader crypto industry. 
    It now sees revenue in the range of $2.57 billion to $2.83
billion versus prior expectations of $3 billion to $4.45
billion.
    
    (Niket Nishant)
     *****
    
    
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