TLDR
- Bakkt’s stock tumbled nearly 30% after losing Bank of America and Webull as clients
- Bank of America represented 17% of Bakkt’s loyalty services revenue
- Webull accounted for 74% of Bakkt’s crypto services revenue
- The company has postponed its earnings call to March 19
- Bakkt’s stock is down over 96% from its all-time high of $1,063 in October 2021
Bakkt Holdings, a cryptocurrency custody firm, saw its stock price plummet over 27% on March 18 after announcing the loss of two major clients. The company’s shares closed at $9.33, marking a steep decline following news that both Bank of America and Webull would not be renewing their commercial agreements.
In a regulatory filing on March 17, Bakkt revealed that Bank of America had given notice it would not renew its partnership when it expires on April 22. The filing also disclosed that brokerage platform Webull had decided to end its agreement upon expiration on June 14.
These client losses represent a major blow to Bakkt’s revenue streams. Bank of America accounted for approximately 17% of Bakkt’s loyalty services revenue in the nine months ending September 30, 2024.
The impact of Webull’s departure is even more severe. Webull represented about 74% of the company’s crypto services revenue during the same period.
The stock continued to decline after regular trading hours. BKKT saw a further 2.25% drop to $9.12 in after-hours trading, according to Google Finance data.
Revenue Fallout
The current stock price reflects a massive decline from Bakkt’s peak performance. Overall, BKKT is down more than 96% from its all-time high of $1,063, which it reached on October 29, 2021.
Adding to investor concerns, Bakkt has postponed its earnings conference call twice. The company’s latest rescheduling sets the call for March 19, further fueling uncertainty in the market.
Bakkt was founded in 2018 by the Intercontinental Exchange. The parent company maintains a 55% stake in Bakkt and also owns the New York Stock Exchange (NYSE).
The news has already sparked legal action. The Law Offices of Howard G. Smith announced a possible class action lawsuit against Bakkt, alleging federal securities violations. The potential lawsuit claims that the terminated agreements, combined with the delayed earnings call, caused the stock price to fall “thereby injuring investors.”
As of reporting time, Bakkt, Bank of America, and Webull had not responded to requests for comment on the situation. This silence has left many questions unanswered as investors try to assess the company’s future prospects.
This isn’t the first time Bakkt has faced stock volatility. In November last year, Bakkt’s share price jumped over 162% to $29.71 after reports claimed Donald Trump’s media company was in advanced talks to acquire the firm.
Earlier challenges have also plagued the company. Bakkt’s parent company reportedly considered selling it or breaking the firm into smaller entities in June, according to a Bloomberg report.
Bakkt has struggled with stock exchange compliance as well. The company received a notification from the NYSE in March that it wasn’t meeting the stock exchange’s listing rules after its stock spent 30 days closing below $1 on average.
The loss of two major clients comes at a challenging time for Bakkt. The company has requested an extension to file its 2024 annual report with the SEC, further adding to market uncertainty.
Monday’s stock performance reflected the market’s negative reaction to the news. In after-hours trading, some reports indicated the drop was even steeper, with shares falling as much as 35% to $12.83.
Bakkt went public in October 2021 through a merger with VPC Impact Acquisition Holdings. Shortly after going public, the stock reached its all-time high before beginning its long decline to current levels.
