Australian fitness equipment maker Fitell saw its shares fall by 21% on Wednesday after it revealed it had bought over 46,000 Solana (SOL) tokens for about $10 million.
Shares closed the trading session at $6.65, a small increase of 0.15%, and ended after-hours at $6.66, according to Google Finance.
Fitell Shares | Source: Yahoo Finance
The purchase came just a day after Fitell announced it would issue a $100 million convertible note to buy more Solana for its treasury.
The company said it will use 70% of money from each sale to buy digital currencies. The rest of the money will go to support crypto operations, online activities, and the company’s working capital. “With committed institutional support, we look forward to expanding our SOL position, in addition to growing staking revenue, and drive long-term value for shareholders,” said CEO Sam Lu.
Fitell also brought on David Swaney and Cailen Sullivan as advisers. Their job is to help manage the company’s digital assets, find ways to earn more from them, and check risks connected to decentralized finance (DeFi) projects.
This week, Fitell became at least the fifth company to disappoint shareholders after buying crypto. Earlier, Helius Medical Technologies saw its shares fall by almost 34% after buying around $175 million of Solana. Other companies such as CEA Industries, BitMine Immersion Technologies, and Strategy Inc. also experienced drops in stock prices after making similar crypto purchases.
Fitell’s shares have dropped 95.69% this year, including a large fall in February, after analysts called it “overvalued and underperforming.” Despite these losses, the company is continuing its focus on cryptocurrencies and hopes to grow its digital asset holdings and staking revenue.
Many companies are increasing their Solana holdings. Firms like Solmate, Helius, and DeFi Development Corp are putting SOL tokens in their treasuries. Currently, 17.04 million Solana are held by 17 companies, which is almost 3% of Solana’s total supply, according to Strategic SOL Reserve.
Helius Medical Technologies also raised $500 million for its Solana treasury and may increase it to $1.25 billion. Companies like Solmate, formerly Brera Holdings, are using Solana to build infrastructure and grow their treasuries.
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