Facing potential delisting, crypto trading and custody platform Bakkt (NYSE: BKKT) tapped Andy Main as its new president and CEO.
Why it matters: Bakkt has six months to get its stock price above $1.00 and is betting that a leadership change could help regain investor confidence.
Driving the news: The company announced late Monday that board member and former Ogilvy CEO Main will replace Gavin Michael as president and chief executive, effective March 26.
- Michael will continue to serve in an advisory role for the next year, as part of the transition.
- In connection with the appointment, the company pushed its earnings call back from Wednesday, March 20, to Monday, March 25.
Between the lines: The leadership change comes just days after Bakkt received notice that it could be delisted from the NYSE for failing to maintain an average closing price above $1.00 per share over a consecutive 30-day trading period.
Bakkt warned investors last month in an amended SEC filing that it might not have enough cash to continue operations over the next 12 months.
- Subsequently, it entered into a $40 million direct offering with institutional investors and a $10 million concurrent registered direct offering to alleviate those concerns.
Catch up quick: Intercontinental Exchange (ICE), which also owns the NYSE, launched Bakkt as a crypto trading platform in 2018.
- In 2020, ICE spent $300 million to combine it with loyalty rewards provider Bridge2 Solutions.
- Bakkt went public in October 2021 after completing a merger with special purpose acquisition company VPC Impact Acquisition Holdings.
Yes, but: Bakkt has struggled since then, with its stock price falling from about $10 when it went public to $0.52 at Monday's close.
- The company pivoted to serve B2B clients after its consumer product struggled to find traction.
- To pursue those institutional customers, it acquired Apex Crypto in late 2022 in a deal that — at the time — was worth up to $200 million.
What they're saying: "I look forward to sharing my plans for enhancing shareholder value on our upcoming earnings call," Main said in a company statement.
- "With the proceeds from our recent capital raise, and our plans to reduce cash expenses ... and related cost savings, we believe we have alleviated the conditions that raised substantial doubt about our ability to continue as a going concern," he added.
