Shares of small crypto exchange Bakkt surge 160% amid talks with Trump Media
On Monday, November 18, shares of the crypto exchange Bakkt, majority-owned by major exchange operator Intercontinental Exchange, soared 162%. This came after a story by the FT that Trump Media & Technology Group (TMTG), which owns the Truth Social social media site of president-elect Donald Trump, is in “advanced talks” to acquire Bakkt.
Details
Bakkt stock skyrocketed 162.5% during regular trading on the New York Stock Exchange on Monday, hitting its highest level since February. Trading in the stock was halted several times due to volatility, according to exchange data. By the end of the session, the company’s market capitalization stood at $401.6 million. Shares continued to climb during after-hours trading as well.
What drove the gains
The rally in Bakkt shares followed FT reporting, citing unnamed sources, that TMTG is in “advanced talks” to acquire Bakkt.
The story did not specify a potential price for the deal. Both Intercontinental Exchange and TMTG declined to comment.
Shares of TMTG also rose on Monday, gaining 16.7%.
Context
Intercontinental Exchange, which also owns the NYSE, founded Bakkt in 2018 to serve crypto investors. Bakkt’s first CEO was Kelly Loeffler, a former Republican senator and cochair of Trump’s inaugural committee, who led the company until 2019.
In its most recent quarterly report, Bakkt posted a 60% year-over-year increase in total revenue, which hit $328.4 million, and a 48% reduction in its operating loss, which narrowed to $27.4 million. Nevertheless, in March, the NYSE warned Bakkt of a potential delisting because its stock had traded below the $1 per share average price threshold for at least 30 consecutive trading days. In April, Bakkt executed a 1-for-25 reverse stock split.
The news of the Bakkt-TMTG talks signals further expansion of Trump’s business interests in the crypto sector, notes CNBC. Just three weeks before the election, Trump and his sons began promoting a new token from the crypto project World Liberty Financial, set up by long-time business partners of the now-incoming president. Under an agreement with World Liberty Financial, Trump and his family are entitled to receive 75% of the project’s net revenue without holding any official roles or assuming liability, CNBC has reported.
