Shares of Sequans Communications S.A. (NYSE: SQNS) plummeted by 16% on Tuesday after the company announced it had sold 970 Bitcoin to redeem half of its convertible debt. The US-listed semiconductor company, which specializes in wireless 4G/5G cellular technology for the Internet of Things (IoT), saw its stock price fall to $5.92 following the announcement. This represents a significant decline of nearly 89% from its 2025 high of $53.90, reached shortly after the company unveiled its Bitcoin plans in late June.
The sale, which Sequans described as a "strategic asset reallocation," reduced the company's outstanding debt from $189 million to $94.5 million. As a result of the sale, Sequans' Bitcoin holdings decreased from 3,234 BTC to 2,264 BTC. The company is now the 33rd largest corporate Bitcoin holder globally, a drop from its previous ranking of 29th in July.
Despite the sale, Sequans CEO Georges Karam maintained a confident outlook on the company's Bitcoin strategy. "Our Bitcoin treasury strategy and our deep conviction in Bitcoin remain unchanged," Karam stated. He characterized the transaction as a "tactical decision aimed at unlocking shareholder value given current market conditions".
The company believes that reducing its debt strengthens its financial foundation, removes certain debt covenant constraints, and enables Sequans to pursue a wider set of strategic initiatives. These initiatives include developing and growing its treasury, with Bitcoin remaining a long-term strategic reserve asset. The debt reduction is also expected to enhance the company's previously announced American depositary shares (ADS) buyback program and provide additional financial flexibility.
Sequans adopted Bitcoin as its primary treasury reserve asset earlier this year. The July 7 convertible debt offering, which is now being partially redeemed, was issued less than four months ago. The company has stated it is now better positioned to pursue future capital markets initiatives, including its ADS buyback program, potential issuance of preferred shares, and yield generation on a portion of its bitcoin holdings.
The market's reaction to the Bitcoin sale has been negative, as evidenced by the sharp drop in Sequans' stock price. This decline occurred even as Bitcoin's price experienced a recent drop, falling 3.5% in the last 24 hours to $103,000. This price decrease has been attributed to diminished hopes for interest rate cuts, the prolonged US federal government shutdown, and the large-scale liquidation of long positions.
As of Tuesday, Sequans' Bitcoin Net Asset Value (NAV) is approximately $240 million, which has lowered its debt-to-NAV ratio from 55% to 39%. InvestingPro data indicates that Sequans holds more cash than debt on its balance sheet, with a healthy current ratio of 1.83.
Sequans Communications is headquartered in France and has offices across the United States, United Kingdom, Switzerland, Israel, Finland, Taiwan, and China.
