TLDR
- A significant drop of almost 30% in Bakkt's stock value occurred after it lost both Bank of America and Webull as key clients.
- Bank of America was a major contributor, generating 17% of the revenue from Bakkt's loyalty services.
- Webull played an even larger role, providing about 74% of the revenue for Bakkt's cryptocurrency services.
- The company decided to delay their earnings announcement until March 19.
- Since its peak in October 2021, Bakkt's stock has drastically decreased by over 96%, from $1,063.
Bakkt Holdings, a firm known for its cryptocurrency custody services, saw its stock drop by more than 27% on March 18, following the announcement that it was losing significant clients, Bank of America and Webull. The shares closed at $9.33 amidst the news that these clients would not renew their agreements.
In a regulatory filing on March 17, Bakkt disclosed that Bank of America informed them that their partnership would conclude on April 22. Additionally, Webull also decided to end their partnership upon the contract's expiration on June 14.
The departure of these clients is a severe setback for Bakkt's revenue. Bank of America contributed about 17% to the revenue from loyalty services over a period ending September 30, 2024.
Webull's exit is a more critical loss, as it represented approximately 74% of Bakkt's crypto services revenue during the same timeframe.
After the standard trading period, Bakkt's shares continued to fall, dropping another 2.25% to $9.12 in after-hours trading, as reported by Google Finance.
Revenue Fallout
The current stock price This represents a remarkable downturn from Bakkt's prime days. In total, BKKT has plunged over 96% from its peak of $1,063, achieved on October 29, 2021.
Adding to the turmoil, Bakkt has twice postponed their earnings call, with the latest reschedule set for March 19, exacerbating market concerns.
Founded by the Intercontinental Exchange in 2018, Bakkt has its parent holding a 55% share and also owning the New York Stock Exchange (NYSE).
The situation has already led to legal proceedings. The Law Offices of Howard G. Smith announced the likelihood of a class-action lawsuit against Bakkt, citing breaches of federal securities laws. The lawsuit contends that the terminated agreements and delayed earnings call led to the stock price crash, consequently harming investors.
Up until the report, Bakkt, Bank of America, and Webull have not commented on these developments, leaving many questions open as investors scramble to predict Bakkt’s future path.
Bakkt has faced stock market fluctuations before. In November of the previous year, their share price surged over 162% to $29.71 amid claims that Donald Trump's media company was negotiating a possible acquisition of the firm.
The entity has also encountered past hurdles. Reports suggested in June that their parent company considered selling or restructuring Bakkt into smaller units, according to Bloomberg.
Bakkt has struggled to comply with stock market guidelines as well. In March, they received a notification from the NYSE stating they failed to meet the listing requirements after closing under $1 on average for 30 days.
Losing two key clients has compounded Bakkt’s challenges, prompting them to request more time to file their 2024 annual report with the SEC, intensifying the market's anxiety.
The stock's performance on Monday illustrated the market's adverse response, with certain reports indicating an even steeper after-hours fall of up to 35%, to $12.83.
Bakkt went public in October 2021 via a merger with VPC Impact Acquisition Holdings. Immediately after going public, the stock hit its highest point before a prolonged decline brought it down to its present levels.
