Fitell shares plunge 21% after unveiling $10 million Solana treasury strategy

The Nasdaq-listed fitness equipment maker Fitell saw its shares fall 21% on Wednesday after unveiling a bold new strategy to build a Fitell Solana treasury worth millions. The company disclosed that it had purchased more than 46,000 Solana tokens, valued at approximately $10 million, as the first step in its pivot toward digital assets.

Despite the announcement, Fitell’s stock closed the day at $6.65, only a 0.15% uptick from the prior session, before edging slightly higher to $6.66 in after-hours trading, according to Google Finance. The market reaction suggests investor skepticism over the viability of turning a fitness equipment maker into a crypto-focused treasury firm.

Broader sell-off among crypto treasury adopters

Fitell is not alone in facing shareholder backlash. Several other companies pursuing similar Solana treasury strategies have also suffered steep stock declines this week.

Helius Medical Technologies, a medical device company, saw its shares tumble nearly 34% after announcing a $175 million Solana purchase. CEA Industries, BitMine Immersion Technologies, and Strategy Inc.—firms holding BNB, Ethereum, and Bitcoin treasuries respectively—recorded declines of 19.5%, 10%, and 2.5% following comparable crypto buys.

The growing wave of losses underscores the market’s unease with firms tying their financial stability to volatile digital assets.

Fitell pivots from fitness to crypto treasury

Just one day before its purchase, Fitell revealed a major pivot, launching a $100 million convertible note designed to fund its Fitell Solana treasury. Under the plan, 70% of net proceeds from each note transaction will go toward buying digital currencies. The remaining funds will support crypto operations, onchain activities, and 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,” — Sam Lu, CEO, Fitell.

To strengthen its digital asset strategy, Fitell appointed David Swaney and Cailen Sullivan as advisers. Their role includes optimizing the Fitell Solana treasury through yield-generation models, while also assessing decentralized finance (DeFi) opportunities and related risks.

However, investor confidence remains shaky. Fitell’s shares have already fallen 95.69% this year, with a sharp decline in February after analysts labeled the stock “overvalued and underperforming.”

Solana treasuries expand across industries

The Fitell Solana treasury is part of a wider trend of corporations adopting Solana for their balance sheets. Companies like Solmate, Helius, and DeFi Development Corp have also committed significant funds to Solana treasuries.

Brera Holdings recently rebranded to Solmate, raising $300 million to build Solana infrastructure and expand its treasury. Meanwhile, Helius Medical Technologies plans to raise as much as $1.25 billion for its Solana Digital Asset Treasury (DAT), after securing $500 million through a private placement.

According to the Strategic SOL Reserve, 17 entities now collectively hold 17.04 million Solana, accounting for nearly 2.96% of the cryptocurrency’s total supply locked in Solana treasuries.

Industry observers suggest the trend reflects a growing belief in Solana’s long-term value proposition. But as the Fitell Solana treasury case shows, markets may remain skeptical about non-crypto companies betting their futures on digital assets.