Bakkt Holdings has revealed its plans of going public by partnering with a blank-cheque company. When these two companies merge, we will have two of the frothiest elements in the US markets working together. Bakkt Holdings is a crypto platform owned by Intercontinental Exchange.
According to the New York Stock Exchange parent ICE, Bakkt Holdings has already agreed to merge. Its primary purpose is to acquire the company sponsored by Victory Park Capital, a Chicago-based investment group.
Bakkt Holdings was launched by ICE back in 2018, and Kelly Loeffler was managing it from August 2018 to December 2019. Kelly Loeffler resigned as the chief executive and was later elected as the Georgia Senator in the US. She replaced Johnny Isakson, who retired. However, Ms. Loeffler, married to the chief executive and ICE founder Jeffrey Sprecher. She lost her seat to Raphael Warnock of Democrat in the recent run-off election.
Bakkt is developing an app that will allow users to purchase and sell cryptos and manage other digital assets like gift cards and loyalty points. It aims to get to 30M customers by 2025. Currently, the app is only accessible through invitation. But it has already attracted lots of interest from 400,000 individuals interested in early access. According to ICE, when Bakkt Holdings is listed on NYSE, it will have an enterprise value of up to $1.2 billion. The deal made last Monday highlights how the rising mainstream company’s numbers and investors are dabbling in the crypto sector.
Bakkt is planning to make a public market debut in a month after Coinbase, a viral digital currency exchange. It has revealed its primary intention to float its shares in the initial public offering.
The revelations demonstrate how SPAC offers an easy and smooth path to public markets for firms using new technologies and earlier stage businesses. Last year alone, SPACs did makeup to $76 billion of the $159 billion raised by the IPO’s in the United States, which saw it outpace the traditional listings.
Jeremy Grantham, a veteran investor, described the SPAC craze as “reprehensible”. He managed to make $200 million out of an early bet on QuantumScape, an established battery maker. This is after going public through the SPAC vehicle.
The increase in focus on digital assets comes as BTC (bitcoin), which is known to be one of the most actively traded digital token surging in value in the past few months. However, volatility remains high, which highlights the immaturity of the assets. BTC (bitcoin) prices have dropped sharply at the start of this week. The top UK financial regulator renewing its warning that those investing in cryptocurrencies need to be prepared to lose almost all of their capital.
Bakkt provides a crypto storage service together with BTC (bitcoin) derivatives contracts. The ICE revenues closely related to Bakkt are estimated to be around $9M for the fourth quarter of 2020. It also has operating expenses of around $39 million. Its balance sheet will have approximately $500M in cash, reflecting $207M held by Spac’s trust account and $325M private share placement in the combined entity, including $50M ICE contribution.
“Citigroup’s global consumer bank former head of technology Gavin Michael will take over as the combined company chief executive,” revealed Bakkt on Monday. “Average consumers have a wealth of digital assets although they rarely track their value and lack the right tools to help them manage and make good use of them,” claimed Mr. Michael. The Bakkt’s interim chief executive, David Clifton, will join the combined company’s board when the deal closes.