French Chipmaker Sequans Plans $200 Million Share Sale to Construct Bitcoin Treasury – Decrypt

Sequans Communications (NYSE: SQNS), a Paris-based semiconductor agency listed on the New York Inventory Alternate, has filed to boost as much as $200 million by means of an at-the-market fairness program, with proceeds directed primarily towards Bitcoin purchases below its long-term treasury technique.

The brand new program helps the primary section of Sequan’s efforts at establishing its treasury basis. Sequans intends “to make use of it judiciously to optimize treasury,” CEO Dr. Georges Karam stated in a assertion on Tuesday.

Its newest SEC submitting allows the corporate to situation American Depositary Shares at its discretion. ADSs are certificates that permit U.S. buyers to commerce shares of international corporations on American exchanges.

In July, Sequans additionally raised $189 million by means of secured convertible debentures and warrants, bringing complete current financing to roughly $376 million.

Thus far, Sequans already holds greater than 3,000 Bitcoin, price about $331 million at present costs, making it one of many largest company holders of Bitcoin in Europe, behind solely Germany’s Bitcoin Group SE. It has additionally set an formidable goal of 100,000 by 2030.

‘Scalable if tailor-made’

Elevating fairness to purchase Bitcoin “actually dilutes current shareholders, and it ties the corporate’s valuation extra on to Bitcoin’s volatility,” Dan Dadybayo, analysis and technique lead at Unstoppable Pockets, advised Decrypt.

However these prospects largely rely upon execution, he argues.

“Fairness-funded BTC purchases act much less like speculative punts and extra like leveraged publicity: shareholders settle for dilution in trade for long-term alignment with Bitcoin’s progress,” he stated.

Nonetheless, “smaller corporations can innovate utilizing structured financing, choices methods, or BTC-backed offers to build up successfully. The mannequin is just not copy-paste, however scalable if tailor-made,” Dadybayo stated.

Dadybayo provides the danger is not with short-term value swings, however on “whether or not the corporate can keep operational self-discipline and keep away from overextension throughout downturns.”

Whereas Sequans can “accumulate BTC at scale relative to its measurement,” he notes that it lacks “the monetary cushion to soak up extended drawdowns with out shareholder ache.”