As I previously reported, shares of the digital asset platform Bakkt Holdings (BKKT 4.78%) fell as much as 12% earlier this morning. But the company has since clawed back those losses and finished the day roughly 2.4% higher from where it initially started.
Volatile trading is nothing new for Bakkt, which early in 2021 announced that it would merge with and go public through a special purpose acquisition company (SPAC).
In October, Bakkt completed the merger and began trading independently. Shares immediately jumped from under $10 to more than $42.50 by the end of October. Since then, however, it's been all downhill, with shares currently below $6.
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Because Bakkt is a crypto marketplace and digital wallet platform that enables people to easier spend and use their crypto assets, the stock can often move with the broader crypto market, which also seems to be fairly volatile today. Bakkt is also coming off a five-day trading session in which the stock is up about 30%.
The stock was likely set for a breather today until Yves Lamoureux, president of the macroeconomic research firm Lamoureux & Co., told MarketWatch this morning that he's doubling down on the stock. Lamoureux said part of his thinking is that the platform could serve as a custodian for stablecoins, particularly those from central banks.
The issue that Bakkt faces in the market is that right now it's not making any money and its revenue is nothing compared with its market cap. The company made $25.8 million through the first nine months of the year and has a market cap of $1.56 billion.
Still, the company projects to do $224 million in revenue after transaction-based expenses this year and then $357 million the year after. As with most companies coming out of a SPAC, the projections are very ambitious, and it doesn't look like Bakkt will even hit its revenue projection for 2021 based on the revenue it has generated so far.
Still, the company's products and services look interesting and the risk-reward at these levels is much better even if Bakkt can't hit on its 2022 revenue projection.
