Sequans Communications announced plans to create a Bitcoin fund worth $384 million amid increasing pressure from the NYSE due to a lack of market capitalization.
Bitcoin Fund Initiative
On June 23, Sequans Communications announced its initiative to create a Bitcoin fund, marking a strategic move beyond its core business in 5G and 4G IoT semiconductors and modules. To fund this initiative, the company plans to raise approximately $384 million through private placements, issuing about $195 million in equity and $189 million in convertible secured debentures.
Reasons for Fund Creation and Partnership
Georges Karam, CEO of Sequans, stated: 'We believe bitcoin’s unique characteristics will enhance our financial resilience and deliver significant value to our shareholders.' Additionally, Sequans plans to partner with Swan Bitcoin, a U.S.-based company offering Bitcoin financial services, to implement this initiative.
Regulatory Issues and Approval Timeline
The initiative requires shareholder approval by June 30. If approved at the meeting, Sequans expects to close the funding round around July 1, subject to meeting all other customary conditions. This decision comes amid delisting threats from the New York Stock Exchange, as the company’s capitalization has fallen below the required $50 million, resulting in a notice of non-compliance with the exchange.
The creation of the Bitcoin fund is part of Sequans' efforts to restore its market capitalization and comply with NYSE requirements, highlighting the company's current state and strategic shifts.
