Bakkt Holdings has faced a significant stock drop following its announcement to raise $75 million through a stock offering.
Stock Offering Announcement
Bakkt Holdings announced plans to raise $75 million through a stock offering and pre-funded warrants. A total of 6,753,627 Class A common shares and warrants for 746,373 shares are planned to be issued. The common stock will be priced at $10, with warrants at $9.9999. This decision was made despite shares trading at $17 at the time of the announcement. Following the stock offering announcement, Bakkt's shares dropped to $10.09.
Company Strategy
On July 28, Bakkt Holdings sold its former core loyalty business for $11 million, which is part of its strategy to pivot to a 'pure-play crypto infrastructure company.' CEO Andy Main stated that this move is necessary to enhance its investment capacity in Bitcoin.
Investment Plans in Cryptocurrency
Bakkt aims to raise up to $1 billion, primarily to invest in its Bitcoin treasury through stock issuance and warrants. In addition to its Bitcoin reserves, the company plans to invest in digital asset technology, offering Bitcoin custody services, facilitating stablecoin payments, enabling digital asset trading, and providing various services for institutional clients.
The sharp decline in Bakkt Holdings' stock highlights the risks associated with strategic shifts and stock offerings amid cryptocurrency market volatility.
