By Mark Hunter
1 day agoTue Nov 19 2024 08:45:14
Reading Time: 2 minutes
- Donald Trump’s media company has entered advanced discussions to acquire cryptocurrency trading platform Bakkt
- Trump Media and Technology Group plans an all-share purchase to expand its operations beyond social media, leveraging its $6 billion valuation
- Bakkt, struggling with profitability, saw its stock soar 162% after news of the negotiations surfaced
Donald Trump’s media venture, Trump Media and Technology Group (TMTG), is negotiating an acquisition of Bakkt, the cryptocurrency trading platform owned by Intercontinental Exchange. The deal aims to extend TMTG’s business beyond its Truth Social platform and further cement the President-elect’s interest in the crypto sector. Bakkt has struggled for profitability since launching in 2019, to the point where it was known in June to be considering a sale.
TMTG Eyes Crypto Expansion
The potential move for Bakkt is one that, on the surface, suits both parties. Bakkt, owned by Intercontinental Exchange, was the great hope for institutional adoption of crypto when it launched in 2019, but the portal has struggled for customers ever since its launch. With retail users still preferring the likes of Coinbase and Binance and institutional buyers preferring ETFs or stocks of Bitcoin-centric companies like Microstrategy, Bakkt has encountered problems trying to attract a user base.
TMTG’s interest reflects Donald Trump’s alleged new interest in crypto, with his team apparently confident of turning around the failing business. The group, which manages the Truth Social platform, boasts a robust $6 billion valuation despite generating modest revenues of $2.6 million this year. According to the Financial Times, it is closing in on the acquisition of Bakkt in an all-share deal, a move which marks an ambitious pivot into cryptocurrency markets.
Bakkt’s Journey and Challenges
Launched by ICE and previously led by Kelly Loeffler, Bakkt has struggled to achieve consistent profitability. The company operates a crypto custody business licensed by New York authorities but plans to wind down this division, according to individuals familiar with the deal. Bakkt recorded operating losses of $27,000 against $328,000 in revenue for Q3 2023.
The company has faced hurdles including a reverse stock split earlier this year to avoid delisting from the NYSE. Despite these challenges, news of the TMTG talks propelled Bakkt’s shares by 162%, signaling a renewed interest in its prospects.
If finalized, the acquisition would deepen Trump’s connection to the cryptocurrency sector, a relationship bolstered by his promotion of World Liberty Financial, a crypto venture he is tied to. The market response to Trump’s election has been similarly bullish, with Bitcoin rising over 30% amid speculation about favorable industry policies under his administration.
As TMTG diversifies, Truth Social continues to face stiff competition, attracting just 646,000 daily visits compared to X’s 155 million. Nonetheless, the platform’s valuation underscores Trump’s influence, with his stake accounting for over half of his $5.7 billion net worth.
ICE, Bakkt, and TMTG have declined to comment on the developments.
