Fitell shifts strategy toward digital assets but investors react negatively
Shares of Nasdaq-listed Fitell, an Australian fitness equipment maker, dropped sharply this week after the company revealed a major crypto treasury strategy involving a $10 million purchase of Solana (SOL). The move, intended to reposition the company as a hybrid fitness and digital asset player, sent its stock tumbling by more than 21% in Wednesday’s trading session.
On Tuesday, Fitell disclosed plans to allocate 70% of proceeds from a $100 million convertible note into digital currencies, primarily Solana. The following day, the firm confirmed the purchase of more than 46,000 SOL tokens at around $204.67 each, totaling approximately $10 million. The remainder of the funds will be directed toward staking activities, onchain operations, and working capital.
CEO Sam Lu said the strategy aims to deliver long-term value:
“With committed institutional support, we look forward to expanding our SOL position, in addition to growing staking revenue, and driving shareholder value.”
Despite this outlook, Fitell’s stock closed at $6.65, only marginally higher in after-hours trading.
Investor Backlash and Wider Trend
The announcement makes Fitell the fifth company this week to see its stock decline after adding crypto to its balance sheet. Earlier, Helius Medical Technologies saw shares fall nearly 34% following a $175 million Solana buy. CEA Industries and BitMine Immersion Technologies also posted declines of 19.5% and 10%, respectively, while Bitcoin-focused Strategy Inc. slipped 2.5%.
Analysts have remained skeptical, especially as Fitell’s shares are already down over 95% this year, following warnings in February that the company was “overvalued and underperforming.”
While equity investors appear cautious, corporate Solana holdings are expanding quickly. Data from the Strategic SOL Reserve shows that more than 17 million SOL are now held by 17 entities, representing 2.96% of the total supply. Companies such as Solmate, DeFi Development Corp, and Helius Medical Technologies are among the largest participants in this trend.
Disclaimer
This content is for informational purposes only and does not constitute financial, investment, or legal advice. Cryptocurrency trading involves risk and may result in financial loss.