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Donald Trump’s social media company is in advanced talks to buy Bakkt, a cryptocurrency trading venue owned by Intercontinental Exchange, as it pushes to expand beyond online conversation.
The US president-elect’s Trump Media and Technology Group, in which he has pledged to retain his 53 per cent stake, is closing in on an all-share purchase of Bakkt, said two people with knowledge of the talks. The valuation under discussion was not immediately clear but Bakkt’s market capitalisation stood at just over $150mn on Monday.
TMTG, which operates Truth Social, has become one of the most actively traded US stocks since Trump’s election victory as retail investors try to profit on its often-volatile trading moves. Although it has reported just $2.6mn in revenues this year, TMTG has a $6bn equity valuation, giving its management a valuable currency with which to buy other companies.
A successful deal would deepen Trump’s move into the cryptocurrency market after he began promoting a new crypto venture set up by longtime business partners, World Liberty Financial, from which he stands to earn significant fees. Crypto markets have also soared following his election victory, with bitcoin up more than 30 per cent on speculation that his administration would enact favourable legislation for the industry.
Bakkt, which has struggled for profitability since its launch, was created by ICE, and the owner of the New York Stock Exchange still holds a 55 per cent economic interest in it.
Bakkt’s first chief executive was Kelly Loeffler, a former head of marketing at ICE and a Republican ex-senator for Georgia during Trump’s first presidency. She is co-chair of the committee organising his inauguration in January. She is also married to Jeff Sprecher, ICE’s founder, chair and chief executive.
ICE and Bakkt declined to comment. TMTG did not immediately respond to a request for comment.
Bakkt has previously said its crypto custody business, which has a regulatory licence from New York authorities, is likely to be wound down. People familiar with the TMTG talks said it will not be included in the deal.
The crypto business had been set up to hold digital assets such as bitcoin and ether on behalf of customers but failed to gain traction and made operating losses of $27,000 from revenues of $328,000 in the three months to September 30. Bakkt is planning to build a trading platform for institutional investors.
Bakkt faced a delisting from NYSE owing to its lowly share price, until it effected a 1 for 25 reverse stock-split in April. Last week its share price rose 15 per cent. Its shares were up 1 per cent in afternoon trading in New York on Monday. TMTG was down 2.5 per cent.
Truth Social remains tiny in terms of its reach, averaging 646,000 daily visits to its website this month, according to Similarweb, compared with 155mn a day for Elon Musk’s X platform. Even so, the president-elect’s stake now accounts for more than half of his $5.7bn wealth, as calculated by Bloomberg.
Additional reporting by James Fontanella-Khan
https://www.ft.com/content/d7f921d5-3668-4b6b-a98d-2681ad73610f
