Bitcoin rises 2% to $107k 📈 Semler Scientific loses 10% on convertible debt sale; $75 million Bitcoin purchase plan

Semler Scientific (SMLR.US), a healthcare technology firm, has announced plans to raise $75 million through a convertible bond offering to fund additional Bitcoin purchases. This decision aligns with the company’s strategy of using cryptocurrency as part of its treasury reserve. Even more than 2.5% Bitcoin increase today does not stop declines of Semler's Scientific shares today.

• So far, Semler Scientific holds 2,321 Bitcoins, which—at the current Bitcoin price of around $105,000—are valued at $241 million. Notably, the company has reported a $29 million unrealized gain on its Bitcoin holdings. The new funds will allow Semler to continue its Bitcoin accumulation while supporting other corporate activities.
• Inspired by Microstrategy, Semler is following the 'Bitcoin strategy' on a company renowned for its Bitcoin accumulation. These actions can enhance a company's value during a Bitcoin bull run, but they also carry risks during market downturns.
• The funds for Bitcoin purchases will come from the issuance of convertible bonds, meaning bondholders may later convert these into company shares. This could lead to share dilution, reducing the percentage ownership of current shareholders. It's also the main reason of today sell-off
• Semler's strategy makes its market value highly dependent on Bitcoin's price fluctuations. While rising prices could boost the company's value, declines in the cryptocurrency market could have a significant negative impact.

The company’s preliminary fourth-quarter 2024 results show revenue between $12.1 million and $12.5 million, with operating income of $3.4 million to $3.7 million. Despite the positive performance of its Bitcoin holdings, Semler's stock fell as investors remain uncertain about future Bitcoin bull run, while overall Semler's 'core business' slowed down. Also, the company doesn't invest cash into the future business operations and growth, preferring 'speculative' approach about leveraging it's NAV valuation by accumulating Bitcoins. 

Semler Scientific (D1)

Bitcoin (D1)

Bitcoin fluctuates today near the 'all-time-high' zone at $107k.

Source: xStation5

During the yesterday session, we observed almost $178 million in ETF net inflows.

Source: XTB Reserach, Bloomberg Finance L.P.