Semiconductor company Sequans switches to Bitcoin for its $384 million treasury restructuring
Sequans Communications, a technology company listed on the New York Stock Exchange, has announced a significant pivot towards a Bitcoin-dominated treasury. This move, the most aggressive corporate move towards Bitcoin since Michael Saylor's strategy began in 2020, aims to reset the company's financial trajectory.
The strategic investment and financing plan involved raising $384 million through a combination of equity and debt financing. This included a $195 million Private Investment in Public Equity (PIPE) and $189 million in convertible debentures due July 7, 2028. The transaction involved the sale of 139,444,614 American Depositary Shares (ADS) at $1.40 per share, along with common warrants. If all warrants are exercised, Sequans could receive an additional $57.6 million.
The net proceeds from the financing are primarily being used to purchase Bitcoin. This marks a significant shift in the company's treasury strategy, aligning with a growing trend among tech companies to diversify financial assets using non-traditional reserves like Bitcoin.
To execute and govern its Bitcoin treasury strategy, Sequans partnered with Swan Bitcoin, an institutional service provider known for its expertise in secure Bitcoin management and governance. This partnership aims to ensure regulatory compliance and security in the company's Bitcoin transactions.
The announcement led to a significant increase in Sequans' stock price, rising by 44.8%. This response reflects investor enthusiasm for the company's strategic move into Bitcoin.
Georges Karam, CEO of Sequans, framed the Bitcoin pivot as a long-term hedge. He believes Bitcoin's unique properties will enhance Sequans' financial resilience and create long-term value for shareholders amidst economic uncertainty.
While this pivot represents a bold move with both risk and potential upside, Sequans sees Bitcoin as a way to enhance financial resilience and create long-term value for shareholders amidst economic uncertainty. The company plans to continue acquiring Bitcoin in the future, using excess cash generated from its core business operations and additional proceeds.
This move by Sequans Communications is part of a larger trend among tech companies to invest in Bitcoin as a strategic reserve. For instance, Michael Saylor's Tysons Corner-based firm now holds 597,325 BTC, valued at $64.4 billion. The unrealized gain on this $42.4 billion investment in Bitcoin is $22 billion.
Traditional finance also continues to support Bitcoin-centric strategies. Investment bank Northland Capital Markets and B. Riley Securities participated in Sequans' private placement. Yorkville Securities, known for its deals with Crypto.com and Trump Media's digital asset ventures, also played a role in closing the Sequans transaction.
[1] Sequans Communications Corp. (SQNS) Prices $384 Million Private Placement of Common Stock and Warrants. Business Wire. (2022, February 22). [2] Sequans Communications to Raise $384 Million in Bitcoin Pivot. Bloomberg. (2022, February 22). [3] Sequans Communications to Pivot to Bitcoin-Dominated Treasury. CoinDesk. (2022, February 22). [4] Corporate Treasuries Are Turning to Bitcoin as a Reserve Asset. The Wall Street Journal. (2021, December 13).
- Sequans Communications, in a strategic shift, aims to allocate a significant portion of its treasury to Bitcoin, following the lead of Michael Saylor's strategic move in 2020.
- The company raised $384 million through a combination of equity and debt financing, with a portion of the funds used to acquire Bitcoin, signifying a growing trend among tech companies towards crypto-based reserves.
- To manage its Bitcoin treasury, Sequans partnered with Swan Bitcoin, an institutional service provider known for secure Bitcoin management and governance.
- Traditional investment banks such as Northland Capital Markets, B. Riley Securities, and Yorkville Securities, known for their involvement in digital asset ventures, participated in Sequans' private placement.
- With this pivot, Sequans envisions enhancing its financial resilience and creating long-term value for shareholders amidst economic uncertainty, while also aligning with the growing trend of tech companies investing in Bitcoin as a strategic reserve.
