DeFi Technologies: A Stock Caught Between Legal Storms and Ambitious Growth

DeFi Technologies CA24464X1069

As 2025 draws to a close, DeFi Technologies presents investors with a stark dichotomy. The company's leadership paints a picture of robust operational expansion and future growth, yet this optimism is directly challenged by severe legal headwinds and a significant downward revision in financial guidance. The market is currently grappling with how to weigh these competing narratives of promise and peril.

The most immediate pressure stems from legal action. Multiple law firms have filed class-action lawsuits against DeFi Technologies, alleging securities fraud. The claims focus on statements made between May 12 and November 14, 2025. The litigation accuses the company of making misleading representations concerning its DeFi Alpha arbitrage strategy during that period. Specific allegations include a failure to disclose operational delays in the strategy's rollout, an underestimation of competitive pressures from other Digital Asset Treasury (DAT) providers, and material misrepresentations in its financial forecasts.

These legal accusations culminated in a substantial financial recalibration. On November 14, 2025, the company slashed its full-year 2025 revenue forecast from $218.6 million to approximately $116.6 million—a reduction of 47%. The market reaction was swift and severe, with the stock price declining by 27.59% over the subsequent two trading sessions.

Operational Momentum Amidst Adversity

Contrasting the legal turmoil, the operational story detailed by CEO Johan Wattenström in his year-end letter dated December 30 is notably more positive. The subsidiary Valour is central to this narrative, now offering 102 exchange-traded products (ETPs). DeFi Technologies claims this constitutes the world's most diversified regulated digital-asset ETP portfolio.

The company significantly expanded its market presence in 2025, achieving listings on the London Stock Exchange and the SIX Swiss Exchange. It also entered the B3 exchange in Brazil with Brazilian Depositary Receipts (BDRs) and five digital asset ETPs, which launched on December 23, 2025. For 2026, management has outlined plans for further geographic expansion across Europe, Latin America, Africa, and the Middle East.

Financial Foundation and Governance Concerns

Despite its challenges, DeFi Technologies points to a solid balance sheet. As of the end of the third quarter in 2025, the company reported:

• $165.7 million in liquid funds and digital asset treasury holdings
• $44 million in venture investments
• Zero financial debt
• $100 million in capital raised during 2025

For the first nine months of 2025, it generated roughly $80 million in revenue and $39 million in operating profit. This fundamentally profitable model and strong liquidity position stand in sharp relief against the reduced outlook.

Governance issues, however, add another layer of uncertainty. Board member Stefan Hascoet resigned effective December 22, 2025. Furthermore, the company disclosed it is conducting investigations into "shareholding imbalances" at various broker-dealers. These developments have raised questions about corporate oversight and structure.

Valuation Disconnect and Forward Strategy

In his letter, CEO Wattenström openly referenced a "valuation gap." With a market capitalization of about $285.8 million (as of December 29, 2025) and after subtracting liquidity and investments, the implied value for the core operating business is approximately $76.1 million. This results in an EV/EBITDA multiple of just 1.82.

Looking ahead to 2026, the company has announced several strategic initiatives:

• Establishing Valour Custody as a standalone business unit
• Expanding into decentralized market services, including dark pool trading platforms
• Deploying capital into treasury and trading strategies
• Pursuing selected merger and acquisition opportunities

The stock currently embodies a tense equilibrium. On one side sits ambitious growth, international expansion, and a debt-free balance sheet. On the other, substantial legal liabilities, a drastically lowered revenue forecast, and unresolved governance questions create a powerful counterweight. The critical factors for the share price trajectory will be the evolution of the class-action lawsuits ahead of the lead plaintiff deadline in late January 2026, and the management's ability to execute its expansion plans under these constrained circumstances.