By
Steve Muchoki
April 26th, 2024
Bakkt announced that the US SEC approved its universal shelf registration in Form S-3 to raise up to $150 million in several offerings over the next three years.
Bakkt Holdings Inc (NYSE: BKKT), a crypto-focused company that develops institutional-grade custody and trading services, has now received a major boost to ensure a sustainable future growth prospect. According to a February 14 announcement, the United States Securities and Exchange Commission (SEC) approved Bakkt’s universal shelf registration statement on Form S-3. As a result, Bakkt can conduct one or several capital fundraising of up to $150 million in the next three years. The announcement was a huge welcome to the Bakkt investors, whereby the company’s stock market closed Wednesday trading at $1.03, up 7.82 percent from the day’s opening price.
The company has struggled during the crypto bear market in the past two years, whereby its stock market dropped more than 50 percent. Currently valued at around $266 million, Bakkt is now well positioned to grow through the confirmed bull cycle in the coming quarters. Moreover, a significant amount of capital has proliferated the crypto industry, presumably from the Gold ETF investments and also the traditional stock market.
“If Bakkt decides to raise capital in a future offering using such a registration statement, Bakkt will describe the specific details of that future offering in a prospectus supplement that is filed with the SEC. Bakkt believes the flexibility of a shelf registration on Form S-3 will provide the Company with significant benefits when raising capital in the future,” Bakkt noted.
Bakkt and the Web3 Market Industry
Founded in 2018, Bakkt has been developing products that enable institutional investors to seamlessly interact with the web3 industry. One of the most popular Bakkt products is the custody solution that is used due to its key features, including comprehensive Know Your Customer (KYC) and the Anti Money Laundering (AML) program, among others. Some of the notable Bakkt Customers include Webull Pay, Finequities, BitGo, and Fireblocks, among others.
Backed by Intercontinental Exchange, Bakkt suffered from low cash reserves throughout last year despite the notable crypto rebound led by Burcoins. Notably, Bakkt announced that it lost $44.9 million, $50.5 million, and $51.7 million, respectively, through the first three quarters of 2023. Cumulatively, the company has registered losses of about $2.26 billion since the fourth quarter of 2021.
However, the company is still confident its financial statements can turn around for the better in the coming two to three years amid the confirmed bull cycle. Moreover, the approval of several spot Bitcoin ETFs in the United States has attracted higher cash inflows to the Bitcoin industry on a daily basis than the miners are producing. Nevertheless, Bakkt is facing significant competition from other web3-focused companies in the United States and other jurisdictions, thus complicating its recovery process.
