Bakkt Holdings, Inc. grapples with NYSE non-compliance notice due to sub-$1 share price, considers reverse stock split among measures to regain compliance.
Bakkt Holdings, Inc., a prominent player in the cryptocurrency market, received a notification from the New York Stock Exchange (NYSE) on March 14, 2024, regarding non-compliance with the exchange’s minimum share price rule. The NYSE Listed Company Manual’s Section 802.01C mandates that the average closing price of a company’s common stock must remain above $1.00 per share over a consecutive 30-day trading period. Bakkt’s stock failed to meet this requirement, with its average share price falling below the threshold.
The notice from NYSE, however, does not trigger the immediate delisting of Bakkt’s common stock. Instead, it starts the clock on a six-month period during which Bakkt can regain compliance. Compliance can be achieved if the stock reaches a closing price of at least $1.00 on the last trading day of any calendar month within this period and maintains an average closing price of at least $1.00 over the 30 trading-day period ending on that day.
Bakkt has expressed its intention to address the deficiency, with several options on the table, including a reverse stock split, pending shareholder approval. A reverse stock split reduces the number of shares in circulation, consequently increasing the share price, without affecting the company’s market capitalization.
This situation underscores the volatility and regulatory challenges faced by companies in the crypto space. Bakkt’s forward-looking statements indicate a determination to overcome these hurdles, but they also acknowledge the company’s many challenges, including maintaining its listing on the NYSE amidst a rapidly evolving technological and regulatory landscape.
Founded in 2018, Bakkt offers institutional-grade custody, trading, and onramp capabilities for cryptocurrency, positioning itself as a leader in supporting long-term crypto economy engagement. While headquartered in Alpharetta, GA, Bakkt’s influence extends globally, as it provides solutions tailored to the burgeoning digital asset market.
The broader implications of Bakkt’s current predicament reflect the ongoing maturation of the crypto industry, which continues to adapt to traditional financial markets’ frameworks and compliance requirements. As such, Bakkt’s journey toward resolving its compliance issues could serve as a valuable case study for other firms operating within this dynamic sector.
As of the date of this press release, Bakkt’s leadership remains committed to returning the company to full compliance with NYSE standards and continues to explore all available alternatives to resolve the share price issue. Investors and stakeholders are advised to monitor the situation closely, as the company’s efforts to remedy the non-compliance could have significant implications for its future operations and the broader crypto market.
Bakkt’s ability to navigate this challenge will be closely watched by investors and regulators alike, offering insights into the resilience of crypto-focused businesses in the face of regulatory pressures and market fluctuations.
Image source: Shutterstock