(Kitco News) – Trump Media, the social media company launched by President-elect Donald Trump, is reportedly in advanced talks to buy the Bakkt cryptocurrency exchange, which is currently owned by the Intercontinental Exchange (ICE).
According to a report from the Financial Times, Trump Media is looking to acquire the crypto exchange as it works to develop a more involved relationship with the crypto market.
Trump currently controls 53% of the available DJT shares for the Trump Media and Technology Group (TMTG) and has pledged to retain his stake. He is now looking to expand his burgeoning crypto empire and is closing in on an all-share purchase of Bakkt, said two people with knowledge of the talks.
While the deal's valuation remains unclear, Bakkt had a market capitalization of just over $150 million as of Monday. After the report from FT made the rounds on social media, Bakkt shares rallied 162%, while DJT shares climbed 16.7%.
DJT has been on a wild ride this year amid Trump’s re-election campaign, at one point climbing to a high of $79.50, only to crash to a low of $11.83. At the time of writing, DJT trades at $30.30, an increase of 13.6% from the Monday low.
It is now one of the most actively traded U.S. stocks following Trump’s victory as retail investors attempt to capitalize on its crypto-like volatility. TMTG currently has a $6 billion equity valuation, which provides ample funds to acquire other companies.
The attempt to acquire Bakkt follows the Trump family’s launch of the World Liberty Financial decentralized finance (DeFi) platform, which received a lukewarm response from crypto investors.
Trump was a vocal advocate for cryptocurrencies on the campaign trail, and his re-election helped spark a 33% rally in the price of Bitcoin (BTC) based on the hopes that his administration will put an end to the crackdown that has taken place under President Biden and enact advantageous crypto legislation.
Bakkt was launched by ICE, the parent company of the New York Stock Exchange (NYSE), in September 2019 to provide institutional-grade solutions for digital assets. The platform initially focused on Bitcoin futures contracts and has since expanded to include additional services like digital asset custody and payment solutions, but it has struggled to generate profits. In the three months leading up to September 30, the platform had operating losses of $27,000 from revenues of just $328,000.
At one point, BKKT shares faced delisting from the NYSE due to its low share price, forcing the company to implement a 1 for 25 reverse stock split in April.
Amid the talks with TMTG and attempts to restructure the business, Bakkt has said it will now focus on building a trading platform for institutional investors. According to people familiar with the TMTG talks, the platform’s crypto custody service is likely to be wound down and is not included in the deal.
At the time of publication, ICE, Bakkt, and TMTG declined to comment on the ongoing talks.
