Shares of the crypto asset platform Bakkt (BKKT -9.64%) traded more than 13% lower as of 10:32 a.m. ET after the company reported its latest earnings results for the fourth quarter of 2021.
Bakkt reported earnings for the fourth quarter in a fairly confusing manner because it completed its merger with the special purpose acquisition company (SPAC) that took it public during the quarter. So the company broke down results into two categories: prior to the acquisition being completed, and after the acquisition got completed and Bakkt began trading independently.
After the acquisition closed on Oct. 14, 2021, Bakkt reported a loss of roughly $153 million. The loss, however, included charges related to the acquisition, warrant liabilities, and charges related to the issuance of common stock. Net revenue for the entire quarter was $13.7 million, which rose 45% from the sequential quarter.
Bakkt is also guiding for net revenue to grow to between $60 and $80 billion in 2022. In 2021, total net revenue came out to $39.4 million. However, Bakkt also guided for the company "to recognize quarterly net losses during 2022 as we invest in and ramp up the business."
As I've said previously, I like what Bakkt is building and it has made partnerships with some big names, but its net revenue projections for 2022 are way off from what it had forecast in prior presentations in 2021.
Bakkt is not the only SPAC company guilty of doing this, but I think it does leave the company in more of a show-me situation. After all, a bet on Bakkt is more or less a bet on further crypto adoption.
I would suggest investors look at the platform and its capabilities, but it's hard for me to recommend a stock trading at more than 22 times the top end of projected revenue guidance in 2022, especially after revenue projections have been so far off already.