5G 4G Semiconductor and Module Supplier Sequans Communications S.A. (NYSE ticker SQNS) announced the successful completion of a private placement of bonds and equity, raising a total of $384 million, primarily to launch the company's planned Bitcoin Treasury Initiative and drive Sequans' development in the digital asset domain. Following the news, Sequans' stock price soared from $1.43 USD on July 3rd to $4.72 USD, a significant increase of 143%. The following is based solely on the official press release and does not constitute any recommendation for securities subscription or sale.
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ToggleBitcoin Strategy to Enhance Financial Resilience
Sequans stated that all net proceeds from this fundraising will be used to purchase Bitcoin, marking the first phase of the company's Bitcoin strategy, and will also be used for other Bitcoin-related corporate purposes. The strategy aims to enhance corporate financial stability and long-term shareholder value through Bitcoin allocation, subject to relevant collateral and mortgage conditions.
Details of Private Placement and Convertible Debt Subscription
The private placement consists of two main parts. The first part involves the sale of 139,444,614 American Depositary Shares (ADS), with each ADS representing 10 ordinary shares, at an issue price of $1.40 per unit. This part also includes 20,916,680 exercisable ordinary share prepaid warrants, bringing in approximately $195 million for the company.
The second part involves issuing secured convertible bonds with a total principal of $189 million, maturing on July 7, 2028, with an original issue discount of 4%. The company also issued 20,249,997 ADS prepaid warrants exercisable within 90 days after issuance. Overall, these two parts constitute a total fundraising of approximately $376 million.
The convertible bonds can be converted into ordinary shares or corresponding prepaid warrants, with a conversion price of $2.10 per ADS, subject to adjustment according to contract terms. If all ordinary share warrants are exercised, the company can raise an additional approximately $57.6 million, which will also be used to purchase Bitcoin.
Sequans and Swan Bitcoin Partnership
Sequans CEO Georges Karam stated that with the successful completion of this financing, the company will officially launch its Bitcoin treasury strategy. The scarcity, decentralization, and anti-inflationary characteristics of Bitcoin will strengthen the financial structure and create greater value for shareholders in the future. Sequans also plans to continue acquiring Bitcoin, utilizing cash from operations and additional capital.
To ensure the robust implementation of the strategy, Sequans will collaborate with the renowned Bitcoin financial platform Swan Bitcoin. Swan will provide professional asset acquisition and custody services, helping Sequans maintain high security, governance transparency, and market efficiency throughout the execution process.
Official Legal Disclaimer
Under Section 4(a)(2) and Rule D of the U.S. Securities Act of 1933, this issuance is a private placement, and the related securities cannot be publicly offered or traded within the United States without registration. According to agreements with investors, Sequans will submit a resale registration statement to facilitate subsequent public market trading. This private placement was jointly underwritten by Northland Capital Markets and B. Riley Securities, with Yorkville Securities as the underwriter. For legal counsel, Sequans engaged Lowenstein Sandler LLP as U.S. legal advisors and ARCHERS (AARPI) as French legal advisors. The underwriters received legal support from Goodwin Procter LLP for both U.S. and French legal matters.
Sequans Company Introduction
Sequans Communications S.A. (NYSE ticker SQNS), founded in 2003, is a semiconductor company specializing in IoT cellular wireless communication technology. The company develops products including LTE-M/NB-IoT, 4G LTE Cat 1bis, and 5G NR RedCap/eRedCap technologies, focusing on high-performance, low-power, and security protection. Sequans is headquartered in France, with offices in the United States, United Kingdom, Switzerland, Israel, Hong Kong, Singapore, Taiwan, and China, spanning a global business footprint.
Risk Warning
Cryptocurrency investment carries high risks, with potentially significant price volatility, and you may lose all of your principal. Please carefully assess the risks.
Bitcoin reached a new historical high last week, but MSTR's stock price dropped over 6% on Friday, still far from its November high of $543. Is MSTR, as a Bitcoin leverage, losing its advantage?
ToggleIs mNAV at a Low Point for Two Months, Has MSTR Lost Its Advantage?
As the pioneer of Bit Treasury companies, MicroStrategy has always been known for its Bit leverage and agency advantages, potentially surpassing Bit itself through embedded optionality in structural leverage, net asset value premium, or convertible bonds—bringing amplified returns.
However, observing its mNAV (current stock price to its owned Bit value ratio), which has dropped from a high of 3.89 in November last year to 1.9, hovering below 2 for the past two months, one cannot help but question whether MSTR is losing its advantage as a Bit leverage.
MSTR Not Selected for S&P 500 Index
Twitter founder Jack Dorsey's payment platform Block will replace Hess Corp. (stock code HES) as a component of the S&P 500 Index before opening on 7/23, while the long-awaited Strategy has not been able to join this quarter. If it could enter the S&P 500 Index, Bit would begin to "automatically permeate all portfolios," including traditional 401k, retirement funds, and passive investment portfolios, potentially boosting MSTR's stock price.
Strategy's financial report will be released on 7/31. With Bit prices rising in the second quarter, Strategy previously announced an unrealized Bit gain of $14.05 billion in the second quarter, promising excellent profit records. Since one condition for joining the S&P 500 Index is "positive profit in the most recent quarter," Strategy is expected to qualify in the next quarter, but official inclusion will have to wait until after October.
MSTR Trading Volume Declines, Reduced Volatility Unfavorable for Fundraising
According to 10x Research, MSTR's recent trading volume has significantly dropped, with daily trading amount falling from $15 billion to $5 billion, and 30-day volatility dramatically decreasing from 165% to 58%, only slightly higher than Bit's 43%. High volatility is crucial for raising additional cash by selling stocks and convertible bonds, as embedded stock options require significant price fluctuations to increase their value.
MicroStrategy's Buying Power Weakens, Stock Price Unable to Advance Smoothly
Strategy purchased only 17,075 Bits in June, far below the purchase quantity from January to May. The author speculates this might be due to the recent low mNAV, which is unfavorable for fundraising and affects MicroStrategy's Bit purchasing speed. Additionally, its stock issuance will partially be used to pay high preferred stock dividends, and with increasing competition, these could be reasons why its stock price cannot advance smoothly.
(Bit Reaches New Highs, Why Isn't MSTR Rising?)
| Month | Bit Purchase Quantity |
| January | 24,707 |
| February | 27,989 |
| March | 29,089 |
| April | 25,370 |
| May | 26,695 |
| June | 17,075 |
Risk Warning
Cryptocurrency investment carries high risk, with potentially significant price volatility. You may lose all your principal. Please carefully assess the risks.
