Sequans Stock Skyrockets After Bitcoin Treasury Announcement

Sequans Communications (SQNS), a leader in 5G and 4G IoT solutions, has seen its stock price surge by 43% following the announcement of its new Bitcoin-focused treasury strategy. The company raised $384 million through a combination of equity and debt offerings, earmarked for Bitcoin purchases.

More than 40 institutional investors are backing this move, positioning Sequans as one of the latest corporations to embrace Bitcoin as a reserve asset.

Key Highlights

• Strategic Shift: Sequans is adopting Bitcoin as part of its treasury strategy, aiming to enhance financial resilience and shareholder value.
• Capital Raise: The company secured $384 million in funding through equity and debt offerings.
• Institutional Backing: Over 40 institutional investors are supporting Sequans' Bitcoin initiative.
• Execution Partner: Swan Bitcoin will provide execution and custody services.
• Stock Surge: SQNS stock jumped 43% after the announcement, briefly reaching $1.81 pre-market.

CEO's Perspective

CEO Georges Karam stated that the company intends to immediately begin purchasing Bitcoin. He highlighted Bitcoin's scarcity and decentralized nature as factors that could bolster Sequans' financial stability and long-term shareholder value.

Sequans plans to continue accumulating Bitcoin using cash flows from its existing business operations and future capital raises.

Fundraising Details

The capital raise involved the sale of over 139 million American Depository Shares (ADSs) and secured convertible debentures maturing in 2028, along with common warrants at $1.40 per ADS. If all warrants are exercised, an additional $57.6 million could be generated. The raised capital will be used for Bitcoin purchases and to satisfy governance obligations.

Partnership with Swan Bitcoin

Sequans is partnering with Swan Bitcoin for execution and custody solutions, mirroring the strategies employed by MicroStrategy and Japan's Metaplanet in using Bitcoin as a hedge against sovereign debt and inflation.

Market Reaction

While SQNS saw a significant one-day gain, it's worth noting that it has experienced a 43.75% decline year-to-date. Bitcoin was trading around $109,100.95, up 1.13% at the time of the announcement.