Trump Media and Technology Group (TMTG), owned by Donald Trump, is in the process of acquiring Bakkt, a cryptocurrency exchange platform. The Financial Times revealed that the deal may be completed as an all-stock transaction, marking the company's first significant diversification outside of the Truth Social app.
Following the news, both TMTG and Bakkt saw an increase in their stock prices. Bakkt's shares surged over 160%, with additional gains in after-hours trading, while TMTG's stock climbed more than 16% before slightly declining later. Neither TMTG nor Bakkt has issued an official comment on the ongoing negotiations.
Founded in 2018 by the Intercontinental Exchange (ICE), Bakkt was initially a platform that sought to incorporate or introduce cryptocurrencies directly into the traditional financial sector, partnering with major companies like Starbucks and Mastercard. However, the platform has failed to sustain its market performance due to competition from big players within the crypto market.
Bakkt recently issued some cautionary statements about its financial stability and could be delisted from the NYSE given that it's performed way below the minimum requirement. Although the company has managed to reduce the losses, it has not yet been profitable. Currently, Bakkt has a market capitalization of about $150 million, which TMTG can use to enter the cryptocurrency space, as Bakkt was valued at $7 billion after Trump's election win.
If completed, this acquisition would have a significant meaning for TMTG as it will expand the company's operations far beyond Truth Social. The deal could also correlate with estimations within the field of cryptocurrencies, which regard possible positive changes in legislation under the new government.
Trump owns a 53% stake in TMTG, so he can benefit directly from the acquisition. His family is also involved in another crypto firm, World Liberty Financial, which deals with decentralized financial systems and token issuing.
Bakkt's parent company, ICE, which retains a 55% stake in the platform, has yet to confirm its position on the potential sale. The acquisition would provide TMTG with an established cryptocurrency platform, including existing partnerships and a foothold in the digital finance space.