Major Setback for Bakkt Holdings
Bakkt Holdings (BKKT), a notable player in the cryptocurrency exchange and custody sector, experienced a significant decline in its share value on Monday. This drop followed the announcement that two of its major clients, Bank of America (BAC) and the crypto trading platform Webull Pay, have opted not to renew their commercial agreements with the firm.
After-Hours Trading Reaction
As a result of this news, Bakkt’s shares fell by an alarming 35% in after-hours trading, settling at $12.83. This decline is particularly stark when considering that the stock reached an all-time high of $1,063 in October 2021, shortly after the company became publicly traded through its merger with VPC Impact Acquisition Holdings.
Impact of Client Losses
The implications of losing these clients are significant for Bakkt’s revenue streams. Bank of America contributed approximately 16% to Bakkt’s loyalty service revenue in 2023, making their departure a notable loss. More critically, Webull accounted for a staggering 74% of Bakkt’s crypto service revenue during the same period. The contract with Bank of America is set to expire on April 22, while the agreement with Webull will conclude on June 14.
Future Outlook and Reporting Delays
In light of these developments, Bakkt has formally requested an extension to file its annual report for 2024 with the Securities and Exchange Commission (SEC). This delay may indicate ongoing challenges as the firm navigates its future without these key partnerships.
Conclusion
The recent announcements have put Bakkt in a precarious position, prompting investors to reconsider their confidence in the company. As Bakkt seeks to adapt and find new revenue sources, the next few months will be critical in determining its future trajectory in the competitive cryptocurrency landscape.
