Workflow
Trump Media nearing deal to buy crypto firm Bakkt: report
BKKTBakkt (BKKT) New York Post·2024-11-19 20:04

Core Insights - President-elect Donald Trump's social media company, Trump Media & Technology Group (TMTG), is in advanced talks to acquire cryptocurrency firm Bakkt in an all-share deal [1][6] - Bakkt's market capitalization was reported to be over 150millionasofMonday[2]−Bakktsharessurgedmorethan162150 million as of Monday [2] - Bakkt shares surged more than 162% on Monday following news of the potential acquisition, with a further increase of 3.3% on Tuesday, while TMTG shares rose over 16% before falling approximately 9% the next day [4] Company Overview - Bakkt has faced challenges in achieving profitability since going public in 2021, particularly in its crypto custody business, which reported operating losses of 27,000 against revenues of 328,000forthethreemonthsendingSeptember30[9]−Thecryptocustodydivisionisexpectedtobeexcludedfromtheacquisitiondeal[10]−TMTG,whichoperatesthesocialmediaplatformTruthSocial,hasalsostruggledwithprofitability,reportinganetlossof328,000 for the three months ending September 30 [9] - The crypto custody division is expected to be excluded from the acquisition deal [10] - TMTG, which operates the social media platform Truth Social, has also struggled with profitability, reporting a net loss of 19 million and approximately $1 million in revenue for the period ending September 30 [13] Market Context - The acquisition represents Trump's continued interest in the cryptocurrency sector, aligning with his pro-crypto stance during his campaign [6] - Following Trump's electoral victory, stocks of Bitcoin and crypto firms have seen significant increases as investors anticipate a relaxation of industry regulations [8] - Truth Social has struggled to compete with larger platforms, having only around 76,000 daily active users in the US as of May, compared to X's 100 million users [14][15]