The share price of cryptocurrency company Bakkt saw a significant decline of over 27% at the close of trading on March 18, following announcements that two of its major clients, Bank of America and Webull, have decided not to renew their commercial agreements.
In a regulatory submission dated March 17, Bakkt revealed it had been informed that Bank of America would not extend its commercial agreement, which is set to expire on April 22. Additionally, Webull has also opted not to renew its partnership, which concludes on June 14.
According to the filing, Bank of America accounted for 17% of Bakkt’s loyalty services revenue for the nine months leading up to September 30, 2024, while Webull represented a hefty 74% of the firm’s crypto services revenue during the same timeframe.
On March 18, Bakkt’s stock (BKKT) dropped sharply after the news, closing 27.28% lower at $9.33. After the market closed, the stock fell further by 2.25% to $9.12, based on data from financial sources.
The decision by Bank of America and Webull not to renew their agreements with Bakkt has led to a stock sell-off. Source: Google Finance
Overall, the stock has plummeted over 96% from its peak of $106.3, reached on October 29, 2021.
Furthermore, Bakkt has delayed its previously scheduled earnings call twice, with the latest rescheduled for March 19.
Founded in 2018 by the Intercontinental Exchange, which holds a 55% stake and also manages the New York Stock Exchange, Bakkt has faced scrutiny in recent times.
A law firm has reportedly indicated a potential class-action lawsuit against Bakkt, alleging violations related to federal securities. The impending lawsuit suggests that the termination of agreements with Bank of America and Webull, combined with the rescheduling of the earnings call, contributed to the decline in Bakkt’s stock price, ultimately harming investors.
Neither Bakkt, Bank of America, nor Webull have provided immediate comments on these developments.
Last November, Bakkt’s stock surged over 162% to $29.71 and continued to rise by 16.4% to $34.59 after reports emerged about discussions for a potential acquisition involving Donald Trump’s media company.
Prior to this, Bakkt’s parent company explored options to either sell the firm or split it into smaller units, as reported in June.
Additionally, in March, Bakkt received a notification from the NYSE regarding noncompliance with listing rules after its stock closed below $1 for an average of 30 days.
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