Sequans shares drop 16% after promoting 970 Bitcoin to chop debt

Shares in Sequans dropped by over 16% after promoting 30% of its Bitcoin to redeem half of its convertible debt, a transfer the semiconductor firm described as a “strategic asset reallocation.”

“Our Bitcoin treasury technique and our deep conviction in Bitcoin stay unchanged,” Sequans CEO Georges Karam mentioned on Tuesday. “This transaction was a tactical determination geared toward unlocking shareholder worth given present market situations.”

The sale lower the chip developer’s Bitcoin (BTC) stash from 3,234 BTC to 2,264 BTC, backsliding from its purpose to build up 100,000 BTC over the subsequent 5 years. Proceeds from the sale had been used to chop its excellent debt from $189 million to $94.5 million. 

“It strengthens our monetary basis and removes sure debt covenant constraints, enabling us to pursue a wider set of strategic initiatives to prudently develop and develop our treasury, with Bitcoin as a long-term strategic reserve asset,” Karam added.

The transfer was not properly obtained by traders, with shares in Sequans (SQNS) falling 16.6% to $5.92 on Tuesday. It’s now 89% off its 2025 excessive of $53.90, which was reached a couple of week after Sequans unveiled its Bitcoin plans in late June.

Greater than 200 publicly traded corporations now maintain Bitcoin on their stability sheets, persevering with the pattern of institutional Bitcoin adoption after spot Bitcoin exchange-traded funds launched within the US final 12 months.

Associated: Why Zcash and privateness tokens are again within the dialog

Many crypto treasury corporations have seen their shares rally on asserting the brand new technique, however many have now plunged after the preliminary hype pale.

The declines in lots of companies have led analysts to forged doubt on the sustainability of Bitcoin treasury methods, notably these of companies that aren’t already in a robust monetary place