Shares in Sequans experienced a significant drop of over 16% following the company's decision to sell 30% of its Bitcoin holdings to redeem half of its convertible debt. The semiconductor company characterized this move as a "strategic asset reallocation."
"Our Bitcoin treasury strategy and our deep conviction in Bitcoin remain unchanged," Sequans CEO Georges Karam stated on Tuesday. "This transaction was a tactical decision aimed at unlocking shareholder value given current market conditions."
The sale reduced the chip developer's Bitcoin (BTC) stash from 3,234 BTC to 2,264 BTC. This action represents a departure from its previously stated goal to accumulate 100,000 BTC over the next five years. The proceeds generated from this sale were directly applied to reduce its outstanding debt from $189 million to $94.5 million.
Karam further elaborated on the impact of this transaction: "It strengthens our financial foundation and removes certain debt covenant constraints, enabling us to pursue a wider set of strategic initiatives to prudently develop and grow our treasury, with Bitcoin as a long-term strategic reserve asset."
The market's reaction to this strategic shift was notably negative, with shares of Sequans (SQNS) falling 16.6% to $5.92 on Tuesday. The stock is now trading 89% below its 2025 high of $53.90, a peak reached approximately one week after the company initially unveiled its Bitcoin plans in late June.
The trend of institutional Bitcoin adoption continues, with more than 200 publicly traded companies now holding Bitcoin on their balance sheets. This ongoing adoption follows the successful launch of spot Bitcoin exchange-traded funds (ETFs) in the US last year.
While many companies that have adopted crypto treasury strategies have seen their stocks rally following such announcements, a significant number have experienced sharp declines after the initial excitement subsided.
The recent downturns in many of these firms have prompted analysts to question the long-term sustainability of Bitcoin treasury strategies, particularly for companies that are not already in a robust financial position.
Analysts Noticed Sequans' Bitcoin Transfer Last Week
Sequans' recent sale occurred just one week after crypto analysts flagged a substantial 2,264 BTC transfer on October 29. This transaction was noted as one of the most significant Bitcoin sales by a publicly traded company to date.
Following this transaction, Sequans has moved down to become the 33rd largest corporate Bitcoin holder. This represents a fall of four places from its position after its initial Bitcoin purchase in mid-July.