Trump Media in Advanced Talks to Buy Crypto Trading Platform, Bakkt
Shares in Bakkt Jumped 162% in Response to The Report That Donald Trump’s company is in Talks of a Deal to Buy The Sruggling Business.
According to the Financial Times, Trump Media & Technology Group (TMTG), the company behind Truth Social, is in advanced talks to acquire Bakkt, a cryptocurrency trading platform.
Bakkt, founded in 2018 by Intercontinental Exchange, the parent company of the New York Stock Exchange, has struggled to maintain profitability. Its market capitalization recently stood at just over $150 million, though shares surged 162% after news of the talks broke.
A Strategic Acquisition For Trump
If finalized, the deal will exclude Bakkt’s crypto custody business, which failed to gain traction and is set to close soon. Instead, TMTG reportedly plans to focus on Bakkt’s planned trading platform for institutional investors.
The move shows Trump’s increasing involvement in the cryptocurrency sector, including the promotion of World Liberty Financial, a business he launched shortly before the recently concluded presidential election. World Liberty Financial’s token launch promised huge returns for the Trump family, who are to receive 75% of net coin revenue from the project.
Bakkt Challenges and Opportunities
Despite Bakkt ‘s promises, the firm is facing significant struggles. It reported a total revenue of $328.4 million and an operating loss of $27.4 million in its most recent fiscal quarter, though this represented a 48% improvement from the previous year.
In addition to financial challenges, Bakkt narrowly avoided delisting from the New York Stock Exchange earlier this year by implementing a 1 for 25 reverse stock split.
Concerns over Bakkt’s presence persist, with management warning that the company might struggle to remain a going concern in the long term. While its chances as an independent entity remain uncertain, a merger with TMTG could provide the necessary boost in resources and leadership needed to be profitable again.
There is also a bit of a relationship between the two companies. Bakkt’s first chief executive was Kelly Loeffler, a former head of marketing at ICE who was also a Republican ex-senator for Georgia during Trump’s first presidency. She is the co-chair of the committee organizing his inauguration in January and is married to Jeff Sprecher, ICE’s founder, chair, and chief executive.
Market Reactions and Implications
News of talks between the two firms sent their share prices soaring. TMTG shares climbed 16.7%, reflecting optimism about the company’s direction. Meanwhile, Bakkt experienced repeated trading halts as its stock price skyrocketed over 162%.
For Trump Media, the deal represents an opportunity to bolster its financial position despite reporting a $363 million net loss on just $2.6 million in revenue this year.
