Bakkt Eyes Crypto Purchases with Potential $1 Billion Raise

Bakkt made this move despite financial uncertainty and a sharp year-to-date decline in its stock price. In the UK, The Smarter Web Company raised £41.2 million just days after buying nearly 200 BTC, growing its holdings to over 543 Bitcoin. Meanwhile, Genius Group plans to use some of the proceeds from two billion-dollar lawsuits to buy up to 5,000 BTC and pay shareholder dividends. Overall, it is clear that several companies are making strategic moves into Bitcoin as part of their corporate treasury strategies.

Bakkt Could Enter Bitcoin Market

Bakkt Holdings Inc., the crypto-focused subsidiary of Intercontinental Exchange, made a bold financial move by filing a Form S-3 with the US Securities and Exchange Commission (SEC). The filing outlines the company’s intent to raise up to $1 billion through a variety of securities offerings, including Class A common stock, preferred stock, debt securities, warrants, or combinations thereof. This capital may be used to purchase Bitcoin and other digital assets, which means that the company is seriously considering a shift in its treasury strategy.

Earlier this month, Bakkt updated its investment policy to allow for allocations into digital assets. While the company has not yet made any cryptocurrency purchases, the filing indicates that it may do so using excess cash or proceeds from the forthcoming securities offerings. 

This approach aligns with the broader trend among tech and finance companies incorporating Bitcoin into their balance sheets. Bakkt said that any future acquisitions of crypto assets will be determined based on market conditions, business performance, capital market receptivity, and other strategic factors.

However, this ambitious plan comes at a precarious time for Bakkt. The company admitted in the same filing that it faces financial uncertainty, and stated that it has a limited operating history and ongoing operational losses. Moreover, the firm disclosed that it “identified conditions and events that raised substantial doubt about our ability to continue as a going concern.” This means that raising new capital will be crucial to stabilize its financial footing.

Bakkt YTD share price (Source: Google Finance)

Despite these challenges, Bakkt saw a modest 3% uptick in its share price on Thursday, closing at $13.33. Still, the stock is down 46% since the beginning of the year, partly due to the loss of major clients like Bank of America and Webull, which chose not to renew their commercial agreements.

Nonetheless, Bakkt is still optimistic about the future of digital assets. The company recently shared its excitement about a wave of upcoming crypto IPOs, including filings from Circle, eToro, and Gemini. In a post on X, Bakkt described these developments as positive indicators that suggest growing institutional momentum and maturity in the crypto market.

UK Firm Ramps Up Bitcoin and Raises Millions

The Smarter Web Company, a UK-based web design and marketing firm, also recently raised £41.2 million from institutional investors just days after making a large Bitcoin purchase. The capital was secured through an accelerated bookbuild process and a subscription offering, allowing the company to raise £36.27 million from the bookbuild and an additional £4.97 million from subscription participants. The shares were offered at a price of £2.90 ($3.98) each, with the new stock expected to take effect from July 1.

This fundraising effort closely followed the company’s announcement that it bought 196.8 Bitcoin at an average price of $103,290 per BTC. It ended up spending over $20 million on the purchase. As of Tuesday, The Smarter Web Company held a total of 543.52 Bitcoin, which was acquired at an average price of $104,450. This means that its crypto treasury has a valuation of around $58.19 million based on current prices. The company has been actively growing its Bitcoin holdings, and increased its stack by 460.28 BTC in June alone. At the end of May, the firm held only 83.24 BTC.

The company began its Bitcoin treasury strategy in April, although it has accepted Bitcoin as a form of payment since 2023. Despite these aggressive moves into the digital asset space, its stock performance has shown volatility. 

The Smarter Web Company trades on the OTCQB market in the United States under the ticker TSWCF. On Thursday, its shares declined by 15%, closing at $3.56 after reaching an intraday low of $3.19. In after-hours trading, the stock slipped an additional 1.8% to $3.49. Nevertheless, the company’s shares are still up 270+% year-to-date.

Smarter Web Company YTD share price (Source: Google Finance)

Other UK firms are also jumping into Bitcoin despite the country’s regulatory ambiguity around digital assets. On Tuesday, London-listed Bitcoin treasury firm Vinanz announced the acquisition of 37.72 BTC. Meanwhile, investment firm Abraxas Capital made headlines in April with a $250 million Bitcoin purchase.

Genius Group Plans Bitcoin Boost from Lawsuit Wins

Other firms are finding creative ways to stock up on crypto. Genius Group, an artificial intelligence-driven education technology firm, announced plans to distribute any proceeds from ongoing billion-dollar lawsuits directly to shareholders while allocating a large portion to expanding its Bitcoin treasury. In a press release that was issued on Thursday, the company’s board of directors approved a strategy to repurpose potential winnings from two legal cases seeking over $1 billion in combined damages.

One of the lawsuits has already been filed under the Racketeer Influenced and Corrupt Organizations Act (RICO), targeting LZGI International with claims exceeding $750 million. The second lawsuit, according to CEO Roger Hamilton, is expected to be filed soon. Based on 2023 figures, Genius Group estimates damages of at least $262 million, although the amount could grow as it accounts for potential harm from 2024 and 2025.

Hamilton explained that the legal actions are designed to recover shareholder value lost due to alleged misconduct by the defendants. He also affirmed the board's position that any recovered funds should be used solely to benefit shareholders. Under the proposed distribution model, 50% of any legal winnings will be paid out as a special dividend, while the remaining 50% would be allocated to purchasing Bitcoin for the company’s treasury.

If Genius Group successfully wins both cases, the payout will amount to approximately $7 per share, and the firm would acquire around 5,000 Bitcoin based on current market prices. The company clarified, however, that there is no guarantee of winning either case or receiving any proceeds.

Genius Group has already made moves to build its Bitcoin holdings. In fact, it increased its treasury by over 50% in June through a series of acquisitions. The company is targeting a total of 1,000 BTC for its corporate treasury.