Bakkt Holdings, Inc. struggles with NYSE non-compliance notice due to share price below $1, mulls reverse stock split among measures to restore compliance.
Bakkt Holdings, Inc., a prominent player in the cryptocurrency market, received a notice from the New York Stock Exchange (NYSE) on March 14, 2024 regarding non-compliance with the exchange’s minimum share price rule. Section 802.01C of the NYSE Listed Company Manual requires that the average closing price of a company’s common stock remain above $1.00 per share for a consecutive 30-day trading period. Bakkt’s stock failed to meet that requirement, with its average price falling below the threshold.
However, the NYSE announcement does not result in an immediate delisting of Bakkt’s common stock. Instead, it starts the clock on a six-month period during which Bakkt can restore compliance. Compliance may be achieved if the stock reaches a closing price of at least $1.00 on the last trading day of each calendar month within such period and maintains an average closing price of at least $1.00 during the 30 trading day period ending on this day.
Bakkt has expressed its intention to address the shortfall, with several options on the table, including a reverse stock split, pending shareholder approval. A reverse stock split reduces the number of shares outstanding, thereby increasing the stock price without affecting the company’s market capitalization.
This situation highlights the volatility and regulatory challenges facing companies in the crypto space. Bakkt’s forward-looking statements show a determination to overcome these hurdles, but also acknowledge the many challenges facing the company, including maintaining its NYSE listing amid a rapidly evolving technological and regulatory environment.
Founded in 2018, Bakkt offers institutional custody, trading and onramp capabilities for cryptocurrency, positioning itself as a leader in supporting long-term engagement of the crypto economy. Although headquartered in Alpharetta, Georgia, Bakkt’s influence extends globally as it provides solutions tailored to the growing digital asset market.
The broader implications of Bakkt’s current predicament reflect the continued maturation of the crypto industry, which continues to adapt to the framework of traditional financial markets and compliance requirements. As such, Bakkt’s journey to resolving compliance issues can serve as a valuable case study for other firms operating in this dynamic sector.
As of the date of this press release, Bakkt’s management 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 address the discrepancy could have significant implications for its future operations and the broader crypto market.
Bakkt’s ability to meet this challenge will be closely watched by investors and regulators alike, offering insights into the resilience of the crypto-focused business in the face of regulatory pressure and market volatility.
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