Can DeFi Technologies Stock Recover Amid Legal Headwinds?

Shares of DeFi Technologies are attempting a recovery, recently pushing back above the psychologically significant $1.00 level on the Nasdaq. This follows a turbulent final quarter, but the path forward is complicated. While new leadership emphasizes fundamental strength and strategic growth, a looming class-action lawsuit casts a shadow over the stock's prospects. The central question for investors is whether the company can move past the damage caused by a major forecast revision or if further challenges lie ahead.

Currently trading around €0.876 on European exchanges, the stock shows a modest daily gain of just over two percent. In the US, it managed to close just above the one-dollar threshold at $1.01 in the latest session. This tentative stabilization, however, faces a significant legal challenge. The law firm Faruqi & Faruqi recently reminded investors of a January 30 deadline to join a planned class-action suit. The litigation stems from a dramatic downward revision of the company's revenue forecast in November 2025. At that time, the sales target was nearly halved, dropping from approximately $218 million to $116.6 million, due to issues within its arbitrage trading operations.

Company management contends that the persistent discount in the share price is unwarranted. CEO Johan Wattenström, who assumed his role in mid-November, argued in a recent letter to shareholders that the market is mistakenly valuing DeFi Technologies as a turnaround case. He points to robust underlying figures: during the first three quarters of 2025, the company generated roughly $80 million in revenue and $39 million in operating income, all while maintaining a debt-free balance sheet.

Should investors sell immediately? Or is it worth buying DeFi Technologies?

Wattenström highlights a clear disconnect between the firm's market capitalization and the earning power of its core operating units, such as Valour and Stillman Digital. When compared to peers in the crypto sector, which often trade at higher valuation multiples despite weaker profitability, DeFi Technologies' stock appears to be undervalued.

Strategic Pivot: Expansion into Brazil

A key part of the strategy to reduce reliance on volatile proprietary trading is an aggressive international expansion. A major milestone was achieved with a mid-December market entry into Brazil. By listing its crypto exchange-traded products (ETPs) on the B3 exchange in São Paulo, DeFi Technologies is gaining access to Latin America's largest financial market. This move is designed to create more stable, institutionally-driven revenue streams and, over the long term, offset the fluctuations from the arbitrage division.

In the near term, investor focus remains on defending the $1.00 level to sustainably exit penny-stock territory on the Nasdaq. Fundamentally, the annual report expected in March 2026 will be critical. It must demonstrate whether the strategic realignment is taking hold and if confidence can be restored following the November shock. Until the late-January lawsuit deadline passes, however, share price volatility is likely to remain elevated.