SEALSQ (LAES) Stock Surges 20%—Quantum Hype or Risky Bet?

Few of you probably heard of SEALSQ Corp (LAES), but the quantum security company has had a big month up until now, climaxing yesterday in a 20% jump in a single day, closing at $3.10. Not bad for a company that’s been flying under most investors’ radars. So, what sparked the sudden rally?

A $100 Million Move, But It’s Complicated

On paper, the news was straightforward: SEALSQ inked a Controlled Equity Offering deal with Cantor Fitzgerald and Maxim Group. This means the company now has permission to sell up to $100 million worth of its shares whenever the timing feels right. That’s a big financial lever, especially for a $355 million company—but there’s a catch, and its name is dilution.

Issuing more shares tends to water down existing shareholders. It’s like adding water to wine—not everyone’s thrilled. So why did the stock rise so drastically?

SEALSQ isn’t just raising cash to keep the lights on; it’s doubling down on post-quantum security—the kind of tech that might one day protect your smart home, your power grid, and even satellites from quantum computer hacks. And that, frankly, is a big deal. However, this recent news isn’t the sole reason for the climb.

Post-Quantum Power Plays

Earlier this month, SEALSQ also secured $20 million in fresh funding and announced plans to expand its U.S.-based quantum chip development. The company’s secure microcontrollers are designed to safeguard critical infrastructure—from electrical grids to IoT devices—against cyberattacks and natural disasters.

And sometimes, the universe aligns in a company’s favor: a recent blackout across Spain and Portugal put real-world urgency behind the pitch.

Then came Quantum and Space Day, an event SEALSQ hosted in France. This event brought together 200+ experts from MIT, space agencies, and cybersecurity firms. Like D-Wave’s (QBTS) “Quantum Realized,” it put SEALSQ on the quantum map and added to the momentum, likely driving new business to the company.

Let’s Talk Numbers

Despite the excitement, SEALSQ is still a loss-making company. Last year, it brought in $12.5 million in revenue but lost nearly twice that, with a $24 million net loss. It doesn’t pay dividends, and the P/E ratio isn’t even applicable (because earnings are negative).

That’s why TipRanks’ AI analyst, Spark, rates the stock as “Neutral,” and the risk remains high.

SEALSQ’s revenue has ups and downs, but profits are sliding fast. Q2 2024 shows a sharp dip in operating income after a brief recovery. Source: Main Street Data (MSD)

The Bottom Line

SEALSQ is a bold play on a high-stakes future. If post-quantum security becomes the next cybersecurity gold rush, this company wants to be at the center of it.

For investors, the question isn’t just “What did SEALSQ announce?” It’s “Can they pull it off?”