Shares of cryptocurrency company Bakkt Holdings Inc BKKT soared on reports that Donald Trump's media company could be eying an acquisition of the company.
While investors who got into the stock early Monday are up big, one hedge fund may have had perfect timing less than a week ago.
What Happened: A report from the Financial Times linked Bakkt Holdings with being the subject of a takeover report from Trump Media & Technology Group DTJ.
Bakkt shares opened for trading at $11.31 on Monday before closing the day up 162.7% to $29.71. The stock was trading another 6.36% higher Tuesday afternoon at $31.59.
The company said it would not comment on "market rumors or speculation.”
Hedge fund Highbridge Capital, which is a unit of JPMorgan Chase JPM, recently took a large stake in the cryptocurrency company.
A 13G filing issued Thursday shows that Highbridge Capital purchased 692,042 Class A shares issuable upon exercise of warrants. The purchase was listed as representing 9.9% of Bakkt based on 6.32 million shares outstanding.
While the filing did not list a purchase price, the investor may be up millions of dollars on the trade depending on the timing.
Bakkt shares traded at a high of $13.05 on Thursday. An investor could have purchased the equivalent of 692,042 shares for $9,031,148.10.
Based on a price of $33.50 for Bakkt shares at the time of writing, the 9.9% stake and 692,042 shares are now worth $23,183,407. This means Highbridge Capital could be up around $14.15 million on its recent purchase, a cool 156.7% gain in less than a week.
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What's Next: News of the reported acquisition come as Trump Media & Technology co-founder Trump is set to return to the White House in January.
Trump is viewed as a more pro-crypto friendly president than the past administration based on his 2024 election campaign.
Bakkt, which went public in October 2021 via SPAC merger, is backed by New York Stock Exchange owner Intercontinental Exchange ICE, which owns a reported 55% of the company.
Bakkt’s first CEO was former U.S. Senator Kelly Loeffler, who represented the state of Georgia as a Republican. Loeffler is helping to organize Trump’s inauguration in January and has close ties to the president-elect.
Bakkt said in June it was exploring strategic alternatives that could include a sale or breakup of the company.
The company previously said its crypto custody business could be wound down. This segment might not be included in a buyout, according to the FT report. Bakkt is planning to build a crypto trading platform geared toward institutional investors.
DJT shares have experienced high volatility and an increased valuation after Trump won the 2024 election.
An acquisition of Bakkt would push Trump’s media company and the president-elect deeper into the cryptocurrency sector, which comes after he promoted a crypto venture called World Liberty Financial with business partners.
BKKT, DJT Price Action: Bakkt stock is up 6.36% to $31.59 on Tuesday versus a 52-week trading range of $5.57 to $68.75. Bakkt stock is down 40.4% year-to-date in 2024.
Trump Media & Technology stock is down 7.8% to $30.20 on Tuesday versus a 52-week trading range of $22.55 to $79.38. Trump Media & Technology stock is up 73.05% year-to-date in 2024.
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