Lead
French firm Sequans Communications (NYSE: SQNS) sold 970 BTC to repay half of its convertible bonds, reducing bond debt from $189 million to $94.5 million. The company retains 2,264 BTC valued at about $240 million, marking the first notable instance of a bitcoin-reserve company liquidating part of its holdings to cut debt.
Key Developments
- Sale executed: 970 BTC liquidated to service debt obligations
- Debt reduction: Convertible bond liabilities cut from $189M to $94.5M
- BTC holdings remaining: 2,264 BTC (about $240M, depending on market price)
- First of its kind: Among companies holding bitcoin treasuries, Sequans is the first publicly identified case to sell for debt repayment
Strategy Shift and Market Context
Sequans shifted its corporate strategy in the summer to mirror the bitcoin accumulation model popularized by Michael Saylor, funding purchases through equity and bond issuance. After an initial surge, SQNS shares have fallen 82% since the pivot, highlighting the volatility and financing challenges attached to a leveraged crypto-treasury approach.
A broader cohort of bitcoin-treasury firms now trades at an mNAV (market cap to net asset value) below 1, implying market capitalizations under the value of their crypto assets. This disconnect makes raising fresh capital more difficult and may push additional companies to sell digital assets to reduce leverage or return capital to shareholders.
Market Impact
- The move spotlights rising balance-sheet pressure across crypto-treasury strategies amid tightening capital markets.
- For Sequans, the action provides immediate deleveraging, potentially stabilizing financing costs while leaving a sizable BTC reserve.
- Trading in SQNS has been volatile, with shares fluctuating in the mid-single-digit range and experiencing double-digit daily moves in recent sessions.
Related Developments
- Last week, ETHZilla conducted its first sale of reserves, offloading about $40 million in Ethereum (ETH) to shore up its position—another sign that some crypto-reserve strategies are transitioning from accumulation to active balance-sheet management.
Looking Ahead
Sequans’ sale may set a precedent for other companies that accumulated crypto via debt and equity issuance. If mNAV discounts persist and capital remains scarce, more selective asset sales could follow across the sector as firms prioritize debt reduction and liquidity management.