Trump Media & Technology Group (NASDAQ:DJT), the eponymous media company tied to the soon-to-be-President Donald Trump, reflects the same level of intrigue and unpredictability as the man himself. Say what you will about President-elect Trump, but one thing is certain: he’s anything but boring, and life without his influence would undoubtedly be less “interesting.”
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Trump Media stock has been up and down in the days since Election 2024. It was up quite a lot on Monday this week (rising nearly 17% over the weekend), but then down again on Tuesday — ~9%. And what was the cause of this recent turbulence?
Cryptocurrency.
More precisely: rumors that Trump Media is in talks to acquire unprofitable cryptocurrency company Bakkt Holdings (NYSE:BKKT)
Bakkt provides businesses and institutions with services tailored to the crypto economy, including institutional-grade custody, trading, and onramp solutions, designed to support secure and efficient engagement with cryptocurrency.
CNBC reported on the supposed merger talks on Monday, characterizing them as negotiations for an all-stock acquisition of Bakkt by Trump Media, but so far at least, it seems neither Trump Media nor Bakkt have commented on the rumors. Certainly, neither company has yet issued a press release confirming that the rumors are true.
So what do we know about this transaction?
Well, first and foremost we know that it sounds a little sketchy. Bakkt came public in 2021 as part of the wave of special purchase acquisition company (SPAC) IPOs that broke on the market during the pandemic, when quarantined investors had a lot of time on their hands as they worked from home — and spent most of that time buying stocks, and very little time researching what they were buying. That’s an inauspicious start, and perhaps investors’ first clue that they should be exceedingly careful when researching this stock.
Which is not to say that spending time researching will necessarily help, because public research on Bakkt is all over the map. Depending on where you look, you can find Bakkt quoted as having as little as $53.1 million in 2023 revenue (according to FactSet data), or perhaps $1.8 billion in revenue (according to Yahoo! Finance). Nor are Wall Street analysts of much help — because it seems on one on Wall Street currently follows Bakkt stock at all.
Going right to the source, Bakkt’s own SEC filings show the company with $780 million in 2023 revenue — all of which was consumed by the company’s more than $1 billion in operating expenses. On the bottom line, Bakkt said this worked out to a net loss of $225.8 million, or $0.84 per share.
Long story short, as best we can tell, Bakkt is a company with lots of revenue but no profits at all. Perversely, that might not be a deal-breaker for Trump Media, however, which is also losing money, but which has almost no revenue — just $3.4 million collected over the last 12 months.
Strange as it may sound to say it, buying Bakkt could actually be a plus for Trump Media stock, because it would instantly give Trump Media something it currently lacks: substantial revenue. And if it doesn’t improve Trump Media’s profits, well, at least it can’t make them much worse than they already are. (See DJT stock analysis)
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Disclaimer: The opinions expressed in this article are solely those of the featured author. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.
