What better way to captivate investor attention this week than to combine cryptocurrency news with special purpose acquisition companies? That is exactly what is happening today, as confirmation of a Bakkt SPAC merger snags headlines. So what do you need to know now? And why is VPC Impact Acquisition (NASDAQ:VIH) slumping?
To start, investors should know that VPC Impact Acquisition is a blank-check company that plans to take Bakkt public. And for those unfamiliar, Bakkt is a cryptocurrency exchange and a marketplace for digital assets.
With that in mind, here is what you need to know about VIH stock and the Bakkt SPAC merger:
- VPC Impact Acquisition first came public in September 2020.
- At the time, the blank-check company raised $200 million by offering 20 million units at $10.
- John Martin, a senior partner at Victory Park Capital, is the CEO of the VPC Impact SPAC.
- Since coming public, VIH stock has focused on acquiring a high-growth business in the fintech space.
- This makes sense, especially as Martin and Victory Park Capital have experience financing other fintech and financial services companies.
- With this in mind, VPC Impact announced on Monday it would take Bakkt public.
- According to the press release, the combined company will have an enterprise value of $2.1 billion.
- Additionally, VPC announced that Gavin Michael will become the new CEO of Bakkt.
- Investors should note that Intercontinental Exchange (NYSE:ICE) launched Bakkt in 2018 to capitalize on the rush of interest in digital assets.
- Now, experts see the Bakkt SPAC merger as a way to further grow the company.
- Importantly, Bakkt allows consumers and institutions to buy, sell, store and spend digital assets.
- It also plans to launch a digital app to make this easier.
- Investors should note the app already has 400,000 early access customers.
What to Know About VIH Stock and the Bakkt SPAC Merger
So what else do you need to know about the Bakkt SPAC merger? Well, before the deal closes, it is important to recognize exactly how the exchange works. Right now Bakkt provides digital wallets for consumers, crypto trading, cash payments, gift card management and loyalty redemption. As Tanzeel Akhtar wrote for CoinDesk earlier this morning, Bakkt acquired loyalty rewards provider Bride2 Solutions last year. As a result, Bakkt executives have said the company has access to a potential $1 trillion market.
Investors likely know that cryptocurrencies have been incredibly popular in recent weeks — and they continue to gain mainstream attention. So why then is the Bakkt SPAC merger news not powering VIH stock to new heights?
One possible answer comes from the role of Kelly Loeffler, the former Bakkt CEO and a politician who just lost her seat as a senator representing Georgia. Loeffler has continued to stir controversy, especially after allegations of insider trading started swirling in 2020. However, despite her recent loss in the Georgia runoffs, it is unlikely that her ties to Bakkt are the reason for the dip in VIH stock.
This means that a more likely reason for the dip in VIH stock comes from the crypto pullback today. After reaching an all-time high above $41,000, bitcoin (CCC:BTC) has been falling. As investors panic and consider the long-term strength of cryptocurrencies, the Bakkt SPAC merger news might just have come at a bad time. Given bitcoin price predictions for $100,000 and above, it is likely the crypto leader will resume its gains soon. When it does, keep a close eye on VIH stock.
On the date of publication, Sarah Smith did not have (either directly or indirectly) any positions in the securities mentioned in this article.
Sarah Smith is a Web Content Producer with InvestorPlace.com.