Bloomberg reported that Bakkt is in discussions with bankers about a potential sale or breakup, although it may remain independent. Bloomberg cited confidential sources. Bakkt was founded by ICE, the owner of the New York Stock Exchange, and after multiple pivots, it still owns around 55% of the listed company. Loss-making Bakkt’s current market capitalization is $255 million after a recent $42.4 million direct stock offering.
During the quarter to March 31 it made a loss of $21 million, which was less than half the previous year’s losses. However, that was a boom quarter during which the Bitcoin ETF was approved, resulting in gross revenues of $841 million. Net revenues from loyalty services were $13.2 million and from crypto services $9.4 million before execution, clearing and brokerage costs of $5.6 million.
In terms of business segments, to our knowledge there are at least four. During 2020, it spent close to $300 million acquiring rewards service provider Bridge2 Solutions. At the time it provided solutions for 4,500 loyalty and employee incentive schemes. In 2022 Bakkt spent $200 million acquiring Apex Crypto, which provides a B2B2C solution for fintechs that want to offer crypto exchange solutions to clients.
Its New York (NYDFS) Trust Charter is among its most valuable assets, enabling it to provide digital asset custody with more than $1 billion in assets under custody. That could be attractive to a company that wants to shortcut the licensing process, although any acquisition would be subject to regulatory review.
Additionally, Bakkt is planning to launch an institutional crypto trading venue (ECN) and recently announced it will use technology from Crossover Markets.
So in terms of a possible breakup, those seem to be the main options.
