In Q4, we only burned about $10M-$11M in cash conducting normal business. There were a few other things that led to a higher loss than this for the quarter, i.e., acquisition related expenses and a massive amount of goodwill/other impairments. The impairments inflate the loss for tax purposes and not much else. We didn't spend that money nor did we lose it. Mostly, the value on purchased assets fell below that which we paid for them so we (and ICE) get to write off the difference. The loss in value we just suffered at the hands of the "going concern" debacle will probably result in a tax deduction for ICE in 2024 as will the loss in value from the dilution oh, and let's not forget the loss in value from the super chipper CEO announcing a reverse split.
So ICE bought a shit-load more shares on the cheap but I'm tempted to do the math and see how much value they likely lost due to the whole rigmarole. At any rate, it appears they're bullish and Bakkt is still backed by ICE.
We know the current quarter is gonna pack a serious punch just from the crypto trade volume. We'll also have an increase in custody income from the increase in those assets' values plus recently acquired custody clients. Also I believe it was Karen who mentioned that our negligible income from our institutional clients was soon to become not so negligible. I'm willing to bet that we burn $5M or less through normal business operations in 1Q24. Anything could push us into break-even territory including but not limited to:
- international expansion
- addition of new coins
- more asset classes
- new institutional clients
- major crypto events (Bitcoin halving, Ethereum ETFs, etc.)
- increased crypto adoption
- oh yeah... loyalty blah blah blah ($15M Net Revenue last quarter!!)
Here's the dilution from the most recent offering ⤴
We have about 46M-47M new shares from the recent offering. This isn't fully diluted as there were also 5-1/2 year warrants issued at a $1.02 strike. The new warrants are also exercisable on a cashless basis but there's a 6 month lock-up on them so that portion of our lovely dilution won't be immediate.
Alright, nobody reads this shit anyway so I'm going to bed but I will say that everyone who is invested in BKKT should for their own peace of mind research Jeff Sprecher. He turned a $10M investment in Coinbase into over $1B. He paid $1000 to start ICE, a Fortune 500 company that owns the New York Stock Exchange and he wrote checks out of his personal account to get it going. He no fuk around. I don't think he throws good money after bad very often and he has excellent advisors. Night dinks
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