Fitell’s Stock Plummets 21% after $10 Million Solana Purchase

Australian fitness equipment manufacturer Fitell experienced a significant drop of 21% on Wednesday following the announcement of its purchase of over 46,000 Solana for approximately $10 million.

The Nasdaq-listed firm concluded the trading day on Wednesday at $6.65, reflecting a minimal increase of just 0.15%. It closed the after-hours trading session at $6.66, according to Google Finance.

Impact of Crypto Investments on Companies

Fitell has now become at least the fifth company this week that has seemingly let down its shareholders with cryptocurrency acquisitions.

• Earlier this week, shares of medical device company Helius Medical Technologies fell nearly 34% after it invested about $175 million into Solana.
• Additionally, the BNB treasury company CEA Industries saw a 19.5% decline, Ethereum treasury firm BitMine Immersion Technologies experienced a 10% decrease, and Strategy Inc., the largest Bitcoin holder, noted a 2.5% drop at the end of Monday’s trading session after making recent crypto purchases.

This announcement came just a day after Fitell disclosed its shift toward cryptocurrency, including issuing a $100 million convertible note to acquire Solana for its treasury.

On Wednesday, the company indicated that it plans to allocate 70% of the net proceeds from these transactions towards purchasing digital currencies. The remaining funds will be used for its operations in cryptocurrency, onchain activities, and as working capital.

“With committed institutional support, we look forward to expanding our SOL position, in addition to growing staking revenue and driving long-term value for shareholders,” stated Fitell CEO Sam Lu.

On Tuesday, the company also brought on David Swaney and Cailen Sullivan as advisers, whose roles include optimizing Fitell’s digital asset treasury through yield-generating models and evaluating DeFi opportunities as well as their associated risks.

Fitell’s stock price has decreased by 95.69% this year, following a substantial decline in February, as analysts labeled it “overvalued and underperforming.”

In the meantime, the growth of Solana digital asset treasuries (DATs) is accelerating, with companies like Solmate, Helius, DeFi Development Corp, and others incorporating SOL into their respective treasuries.

• Last week, Brera Holdings rebranded to Solmate with aims of creating a Solana DAT and establishing infrastructure for the Solana ecosystem after raising $300 million.
• On September 15, Neurotech company Helius Medical Technologies revealed its objective to raise $500 million for its Solana DAT.
• After closing its private placement on September 18, the company kept the option to raise an additional $750 million if it chooses to exercise this right, potentially bringing the total to $1.25 billion.

As of now, 17.04 million Solana are held by 17 entities, representing 2.96% of Solana’s total supply locked within Solana DATs, as reported by Strategic SOL Reserve.