SQNS just reported Q1 earnings — and the story that emerged is stranger than the chip business it was supposed to be.
Q1 revenue fell 24.8% to $6.1 million. The net loss hit $54.3 million, but most of that — $41 million — came from Bitcoin-related impairments. Sequans had been building a crypto treasury alongside its IoT semiconductor operations. In Q1, it sold half its holdings, cutting its Bitcoin stack from 2,139 to 1,114 coins. The stock closed Tuesday at $3.51, down about 1.4% on the week. It has still gained 43% in the past month, a rally that now looks like it was driven as much by crypto enthusiasm as by chip fundamentals.
The short side has been retreating at pace. Short interest has collapsed 61% over the past month, falling to just 1.27% of the free float — roughly 198,000 shares. The one-week drop alone was 26%. That kind of unwinding at low absolute levels means shorts were running toward the exits well before Tuesday's print, not piling in against it. Availability is exceptionally loose at over 2,200% of short interest, meaning there is no meaningful scarcity in the borrow market whatsoever. Borrowing costs have eased too, slipping 21% over the week to around 5.7% APR. The ORTEX short score has drifted down to 38.4 from above 44 just two weeks ago — confirming the de-escalation in short-side conviction.
Options positioning tells a mildly more cautious story. The put/call ratio has climbed to around 0.10 — still very low in absolute terms, but more than double its 20-day average of 0.05, and running roughly 1.3 standard deviations above that mean. In a name this thinly traded in options, even a modest uptick in put buying is worth noting. The ratio is a long way from its 52-week high of 9.24, so it is not alarm territory, but it does suggest a few more participants have been hedging since the earnings date approached.
The fundamental setup is complicated. Q2 guidance came in above consensus — management guided to $6.8–7.4 million in revenue against a $6.2 million estimate. The company also flagged plans to be nearly debt-free by June 1, which is a meaningful balance sheet development for a company that has been loss-making. The EV/EBITDA ratio has moved sharply — down about 14.6 points over the past week — though with the company running a deeply negative P/E and near-zero earnings yield, conventional valuation multiples carry limited weight here. What matters more is the trajectory: EPS surprise ranks in the 98th percentile, suggesting the company has a consistent history of beating low expectations, even when absolute results look weak. FMR LLC filed an updated 13G/A today, maintaining its position as the second-largest institutional holder with a 9.7% stake.
On the peer side, SQNS dipped slightly while most correlated names moved sharply higher. SYNA gained 21% on the week and INDI added 20%. KOPN rose 19%. The divergence is notable — Sequans underperformed its closest correlated peers by a wide margin as its own idiosyncratic Bitcoin story dominated. RGTI gained 11% and AMD added nearly 10%.
The next earnings date is August 4. Between now and then, the question is whether management can close the gap between the chip-revenue trajectory and what has been a volatile, crypto-overlay balance sheet — and whether the debt-free milestone lands as promised.
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