Sequans Communications S.A., a firm that adopted bitcoin as its primary treasury reserve asset, confirmed the sale of 970 BTC to reduce debt and strengthen its balance sheet. The move follows similar actions from other digital asset treasury (DAT) firms, including ethereum-focused ETHzilla, which recently liquidated a portion of its holdings.
'Strategic Asset Reallocation': Sequans’ Bitcoin Sale Gets Roasted Online
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Sequans Sells Bitcoin
According to the Sequans’ (NYSE: SQNS) Nov. 4 announcement, the sale funded the redemption of 50% of Sequans’ convertible debt from its July 7 offering. This reduced the firm’s outstanding debt from $189 million to $94.5 million, while bitcoin reserves declined from 3,234 BTC to 2,264 BTC. Based on current market prices, Sequans’ bitcoin net asset value (NAV) now stands near $240 million, improving its debt-to-NAV ratio from 55% to 39%.
Chief Executive Officer Georges Karam emphasized that the firm’s conviction in bitcoin remains intact despite the sale. “Our bitcoin treasury strategy and deep conviction in bitcoin remain unchanged,” Karam said. “This transaction was a tactical decision aimed at unlocking shareholder value given current market conditions.”
Rumors had already been swirling that Sequans quietly offloaded some BTC after an eyebrow-raising onchain transfer popped up last week. “Welp. It’s official,” quipped the X account Pledditor on Tuesday. “lmfao @ branding the company’s capitulation as a ‘Strategic Asset Reallocation,’” Pledditor added. “So you basically sold BTC at a loss?” one X user fired back under Sequans’ post. “Oops, you weren’t supposed to do that,” another chimed in.
In the press release, Sequans said it expects the debt reduction to boost its American Depositary Share (ADS) buyback program and create greater flexibility for future treasury initiatives. The firm said the deleveraging move removes debt covenant constraints and expands the strategic options available to optimize its bitcoin holdings.
Pledditor later noted that he listened to Sequans earnings call and suspected more BTC could be sold. “Don’t be surprised if they dump even *more* of their bitcoin, more than what has already dumped. ‘The remaining 647 unpledged BTC remain in our treasury are available for the previously announced ADS repurchased program if needed,'” the X account quoted.
Sequans might even take a page out of Saylor’s famously diamond-handed playbook. The company also hinted at potential future initiatives, including the issuance of preferred shares and generating yield from part of its bitcoin treasury. Sequans also remarked it remains focused on disciplined capital management and long-term shareholder value creation.
Founded in Paris, Sequans Communications is a fabless semiconductor company specializing in 4G and 5G connectivity for the Internet of Things (IoT). The firm is one of the earliest public companies to manage a bitcoin-centric treasury, using proceeds from operations and financing to accumulate BTC as a long-term reserve asset.
FAQ ❓
- Why did Sequans sell bitcoin?
To redeem 50% of its convertible debt and improve its balance sheet flexibility. - How much bitcoin does Sequans now hold?
The company holds approximately 2,264 BTC after selling 970 BTC. - What is Sequans’ updated debt-to-NAV ratio?
Sequans reduced its ratio from 55% to 39% following the bitcoin sale. - Does Sequans still plan to hold bitcoin long term?
Yes. The firm stated its conviction in bitcoin remains unchanged and part of its core treasury strategy.
