SCHEDULE: Lynrock Lake Slashes Sequans Stake to 0.7%

Lynrock Lake LP and affiliates significantly reduced their beneficial ownership in Sequans Communications from 16.0% to 0.7% of outstanding shares.

Summary

• Lynrock Lake LP, Lynrock Lake Partners LLC, and Cynthia Paul (collectively, the "Reporting Persons") filed an Amendment No. 4 to Schedule 13G regarding their beneficial ownership in Sequans Communications.
• As of June 30, 2025, the Reporting Persons beneficially owned 40,741,640 Ordinary Shares, representing 16.0% of the class, based on 255,176,342 Ordinary Shares outstanding.
• As of July 31, 2025 (the event date requiring filing), and reported on August 7, 2025, the Reporting Persons beneficially owned 9,370,760 Ordinary Shares, representing 0.7% of the class.
• The current percentage is based on 1,427,163,962 Ordinary Shares outstanding as of July 7, 2025, indicating a substantial increase in total outstanding shares for Sequans Communications.
• The Reporting Persons maintain sole voting and dispositive power over their remaining 9,370,760 shares.

Sentiment

Score: 2

Explanation: The significant reduction in a major institutional investor's stake, coupled with the implied massive dilution of outstanding shares, indicates a very negative development for existing shareholders and suggests a loss of confidence or strategic divestment by the fund.

Negatives

• A significant reduction in beneficial ownership by a major institutional investor (Lynrock Lake LP and affiliates) from 16.0% to 0.7% of Sequans Communications.
• The absolute number of shares held by Lynrock Lake decreased from 40,741,640 to 9,370,760.
• The substantial increase in Sequans Communications' outstanding shares from 255,176,342 (June 30, 2025) to 1,427,163,962 (July 7, 2025) implies significant dilution for existing shareholders.

Risks

• Reduced institutional investor confidence or strategic divestment by a major holder could negatively impact investor sentiment.
• Significant share dilution can depress per-share earnings and stock price, impacting existing shareholders.
• The substantial increase in outstanding shares may indicate a large capital raise or other corporate action that could put downward pressure on the stock.

Future Outlook

The filing does not provide forward-looking statements or guidance from the issuer or the reporting persons beyond the change in ownership.

Industry Context

This filing reflects a significant change in a major institutional investor's position in Sequans Communications, a company operating in the semiconductor or wireless communication industry. Such a reduction in stake by a large holder, especially coupled with substantial share dilution, can be a negative signal within the industry, potentially indicating concerns about future performance or a shift in investment strategy by the fund.

Comparison to Industry Standards

• A reduction in institutional ownership from 16.0% to 0.7% is a substantial divestment, far exceeding typical portfolio rebalancing adjustments seen among comparable technology or semiconductor companies.
• The implied increase in outstanding shares from approximately 255 million to 1.4 billion within a week suggests a massive capital raise or conversion event, which is an unusually high level of dilution compared to standard industry practices for non-distressed companies.
• While specific comparable companies or projects are not mentioned in the filing, such a significant ownership reduction by a major fund like Lynrock Lake would typically be viewed more negatively than similar actions by smaller, less influential funds, and could prompt other institutional investors to re-evaluate their positions in Sequans Communications.

Stakeholder Impact

• Shareholders: Existing shareholders face significant dilution due to the massive increase in outstanding shares and potential negative sentiment from a major institutional investor reducing its stake.
• Investment Professionals: Will likely view this as a negative signal, potentially leading to re-evaluation of investment theses for Sequans Communications.

Key Dates

Recommendation

The filing reveals a substantial reduction in stake by a major institutional investor, Lynrock Lake, from 16.0% to 0.7%. More critically, the underlying data indicates a massive dilution event for Sequans Communications, with outstanding shares increasing from 255 million to over 1.4 billion in a matter of days. This level of dilution, combined with a significant institutional divestment, signals severe negative pressure on per-share value and investor confidence. Seasoned investors would interpret this as a strong sell signal due to the immediate and profound adverse impact on shareholder value.

Keywords

Sequans Communications, Lynrock Lake, Schedule 13G, Beneficial Ownership, Shareholding Change, Institutional Investor, Dilution, SQNS