Trump Media & Technology Group (DJT -2.56%) isn't profitable or generating much revenue, but the one thing it does have is cash, and it could soon put that to work. The company's business centers around its Truth Social platform, and it has been looking at expanding into other areas as well, including streaming video.

And that may not be all, as the social media business appears to have its sights set on acquiring a cryptocurrency company, Bakkt Holdings (BKKT -9.60%).

What is Bakkt Holdings?

Bakkt operates a platform that enables users to buy, sell, and store cryptocurrencies. The company generated $1.9 billion in sales over the trailing 12 months, but with a high cost of sales, it squeezed out a tiny gross profit of just $74 million during that stretch. After factoring in its operating expenses, the business has incurred a loss of over $54 million during the past year.

The company also doesn't guarantee it'll be able to stick around for long. It has mentioned in the past that it "may not be able to continue as a going concern." Earlier this year, the struggling stock also completed a 1-for-25 reverse stock split to help prop up its value and stay above the $1 needed to remain listed on the New York Stock Exchange.

As of the end of September, the company reported cash and cash equivalents totaling $29 million. That's a low figure when you consider that over the past nine months, the company used $52.6 million over the course of its day-to-day operating activities.

Would acquiring Bakkt be a good move for Trump Media?

If Trump Media acquires Bakkt, it could stand to benefit from the hype surrounding cryptocurrencies this year. Bitcoin soared to record highs this year amid excitement that President-elect Donald Trump's pro-crypto stance could help digital currencies reach higher valuations.

On the flip side, however, Bakkt is a cash-burning and unprofitable business. To keep it afloat, Trump Media may need to continuously allocate resources to the company to ensure it can remain operational. The obvious problem for investors is that it may only exacerbate Trump Media's current financial situation. It also isn't profitable or generating positive operating cash flow. While adding Bakkt would diversify Trump Media and significantly grow its revenue, it won't necessarily improve its prospects for profitability.

In the end, Trump Media could need even more cash if it ends up acquiring Bakkt, heightening the risk of dilution and frequent share offerings in the future.

This acquisition wouldn't make Trump Media a better stock to own

Trump Media is a risky investment to hold today. Adding a cryptocurrency trading platform into the mix only adds to the potential risk and volatility for investors. While that could be an attractive development for short-term traders who may see it as an opportunity to buy shares of Trump Media in the hopes of benefiting from growing excitement in the crypto markets, it doesn't make for a safe business to invest in for the long haul.

The social media stock has a market cap of more than $6 billion despite having little justification for such a hefty valuation. Investors are better off waiting on the sidelines because until Trump Media can show that it has a path to generating revenue growth while also improving its bottom line, it'll likely be too risky of an option for most investors to consider. And a deal for Bakkt wouldn't make things any better.