Bakkt stock has been falling because of a confluence of factors including post-merger volatility, weaker-than-expected third-quarter results, and pricing volatility for the cryptocurrency market late in the month. Even with the pullback, the company's share price is up roughly 49% since going public through a special purpose acquisition company (SPAC) merger in October.
Bakkt was taken public through a SPAC merger with VPC Impact Acquisition Holdings on Oct. 15, and its share price surged out of the gate. It's not unusual for newly public companies to see volatile trading after the completion of SPAC combinations, and the cryptocurrency-trading platform company's share price retreated after its initial post-combination pop.
Bakkt published a press release on Nov. 5 announcing that its platform would support Ethereum trading, but the news wasn't enough to trigger any sustained gains for its share price. The company then published its third-quarter results on Nov. 12, reporting sales of $9.14 million and a $28.8 million loss. Revenue was up roughly 38% compared to the prior-year period, but its loss expanded significantly from the $18 million loss it posted in Q3 2020.
Adding in a final negative pricing catalyst, Bitcoin and most other major cryptocurrencies suffered substantial sell-offs late in the month. Bakkt's share price wasn't dramatically affected by the volatility in the crypto market, but the bearish turn in the crypto space likely had some impact.
Bakkt stock has continued to lose ground in December. The company's share price is down roughly 16.5% in the month's trading so far.
Interest in cryptocurrencies has surged this year, and Bakkt could benefit if a growing number of people seek out crypto-wallet services. On the other hand, Bakkt currently has a market capitalization of roughly $703 million, and its highly growth-dependent valuation means that the stock looks like a risky play. There are many other players in the cryptocurrency services market, and new entrants seem to be joining the fray all the time, and it's not clear whether Bakkt will be able to post strong user and engagement growth over the long term.