Sequans (SQNS) Stock Drops 16% After Company Sells 970 Bitcoin to Pay Off Debt

TLDR

• Sequans Communications sold 970 BTC to pay down $94.5 million in convertible debt, cutting its Bitcoin holdings by 30%
• SQNS stock plunged 16.6% to $5.92 following the announcement, now down 89% from its 2025 peak
• The sale reduced the company’s debt-to-net-asset-value ratio from 55% to 39%
• Sequans dropped from 29th to 33rd on the corporate Bitcoin holdings leaderboard
• CEO insists Bitcoin strategy remains intact despite the substantial selloff

Sequans Communications made waves Tuesday by selling 970 Bitcoin to cut its debt load in half. The move sent shares of the IoT chipmaker down 16.6% to $5.92.

The Paris-based semiconductor company sold nearly a third of its Bitcoin treasury. This reduced holdings from 3,234 BTC to 2,264 BTC, worth around $232 million at current prices.

Sequans used the proceeds to redeem $94.5 million of its outstanding convertible debt. Total debt now stands at $94.5 million, down from $189 million.

Karam called it a tactical decision based on current market conditions. He claimed the move unlocks shareholder value while strengthening the financial foundation.

First Major Bitcoin Treasury Selloff

The sale marks a turning point for corporate Bitcoin strategies. Sequans becomes the first publicly listed Bitcoin treasury company to offload a substantial portion of its holdings.

Crypto analysts caught wind of the transaction last week. They flagged a wallet transfer of nearly 1,000 BTC to a Coinbase address on October 29.

The sale knocked Sequans down four spots on the Bitcoin Treasuries leaderboard. The company now ranks 33rd among publicly traded firms holding Bitcoin.

Sequans launched its Bitcoin accumulation strategy in June. The company raised $385 million through debt and equity placements to fund the initiative.

The plan aimed to accumulate 100,000 BTC over five years. That goal now seems more distant after selling 30% of existing holdings.

Stock Performance Takes a Hit

SQNS stock has struggled since announcing its Bitcoin strategy. Shares peaked at $53.90 in late June, shortly after unveiling the treasury plan.

The stock is now down 89% from that high. It has fallen 56% since the company began buying Bitcoin.

The debt reduction did improve some financial metrics. Sequans lowered its debt-to-net-asset-value ratio from 55% to 39%.

Management says this provides more flexibility for share buybacks. It also opens doors for potential preferred-share issuance.

Bitcoin Market Context

Bitcoin dropped below $103,000 on Tuesday. The price represents its lowest level in more than four months.

Over 200 publicly traded companies now hold Bitcoin on their balance sheets. Many saw stock rallies after announcing treasury strategies.

However, enthusiasm has cooled for several firms. Analysts question the sustainability of Bitcoin treasury strategies for companies without strong financial positions.

Sequans maintains its remaining 2,264 BTC represents a long-term strategic reserve asset. The company said it will continue developing its treasury strategy while pursuing other growth initiatives.

The convertible debt was originally issued in July when Sequans started accumulating Bitcoin. Reducing this debt removes certain covenant constraints, according to company statements.

Bitcoin traded around $102,500 at the time of the sale.

The post Sequans (SQNS) Stock Drops 16% After Company Sells 970 Bitcoin to Pay Off Debt appeared first on Blockonomi.