Bitcoin News Today: Bakkt Shares Drop 40% After $75M Public Offering to Buy Bitcoin

Bakkt’s shares tumbled more than 40% in pre-market trading on Tuesday after the cryptocurrency custody and trading platform announced a $75 million public offering to fund bitcoin and digital asset purchases. The stock, which closed at $17.17 on Monday, dropped to around $10.17 following the disclosure, marking a sharp decline from its previous performance. The offering includes 6,753,627 shares of Class A common stock at $10.00 per share and pre-funded warrants for up to 746,373 additional shares at $9.9999 each. Proceeds are expected to total approximately $75 million before underwriting costs, with the company allocating funds for general corporate purposes, including bitcoin acquisitions and working capital [1]. The sale is scheduled to close on or around July 30, contingent on standard closing conditions.

Bakkt also granted underwriters a 30-day option to purchase up to 1,125,000 additional shares or warrants at the offering price. Clear Street and Cohen & Company Capital Markets served as joint book-running managers for the deal [1]. This move follows the company’s previous announcement in June of a broader capital-raising initiative targeting up to $1 billion through equity and debt offerings to support a bitcoin acquisition strategy. However, Bakkt has yet to make any crypto purchases, despite updating its investment policy to include bitcoin and digital assets in its treasury strategy.

The stock’s sharp decline reflects investor skepticism about the firm’s ability to execute its ambitious plans. While the company emphasized its transformation into a “pure-play crypto infrastructure company,” the lack of concrete progress in acquiring digital assets may have raised concerns about operational feasibility. Akshay Naheta, co-CEO of Bakkt, stated the initiative aims to strengthen the firm’s position in the crypto ecosystem, but the market’s reaction suggests uncertainty over the long-term viability of its treasury approach.

Bakkt’s strategy aligns with a growing trend of traditional financial firms leveraging capital to gain exposure to cryptocurrencies. However, the company’s recent performance highlights the challenges faced by firms navigating the volatile crypto market. The public offering’s success could provide critical liquidity, but its effectiveness in stabilizing investor confidence remains untested.

The firm has faced additional scrutiny due to its proximity to high-profile political connections, including reports of advanced talks between Truth Social and Bakkt in November. While no final agreement materialized, the association underscores the complex interplay between crypto ventures and traditional capital markets.

Source: [1] Bakkt stock plummets 40% after announcing pricing of $75 million public offering to buy bitcoin (https://www.theblock.co/post/364599/bakkt-stock-plummets-after-announcing-pricing-of-75-million-public-offering-to-buy-bitcoin?utm_source=rss&utm_medium=rss)