The digital asset custody company is reportedly facing financial difficulties due to a lack of liquidity: resources may not be sufficient for the next 12 months.
According to a recent document filed with the United States Securities and Exchange Commission (SEC), digital asset custody company Bakkt appears to be in a challenging financial situation.
In the document submitted to the SEC, the company stated:
“We do not believe that our cash and restricted cash are sufficient to fund our operations for the 12 months following February 7, 2024.”
The financial outlook of Bakkt
The document anticipates that operational losses and cash burn will persist, further straining the company’s financial situation. If Bakkt fails to secure additional capital through debt or equity offerings, it risks losing the ability to maintain sufficient liquidity and effectively manage its operations.
According to a spokesperson for the company, as reported by Coindesk, Bakkt is seeking to sell up to $150 million in shares to overcome its current challenges.
Following the filing of the document with the SEC, the company’s stock price experienced a significant decline, dropping to $0.87 per share.
The change in strategy and poor results
Originally founded by the Intercontinental Exchange (ICE), Bakkt initially aimed to become a leading bitcoin payment company. One of its initial goals was to help Starbucks customers purchase coffee with bitcoin.
Subsequently, the company decided to change its business model, focusing on B2B custody services and digital asset trading. Despite the intention of this move being to attract a wider market, the results did not meet expectations, fueling disappointment among investors.
