Semler Scientific, a medical technology company, has continued its aggressive move into Bitcoin, adding $25 million worth of the cryptocurrency to its holdings. Despite these efforts to embrace Bitcoin as a primary treasury reserve asset, the company's stock (SMLR) has experienced a notable downturn, sliding 22% year-to-date. This divergence between Bitcoin investment and stock performance raises questions about investor sentiment and the overall strategy.
Semler Scientific's recent purchase involved acquiring 210 Bitcoin in early July at an average price of $118,974 per coin. This brought their total holdings to 4,846 Bitcoin, obtained at an aggregate cost of approximately $455 million and now valued at $577.9 million. The company's commitment to Bitcoin is further underscored by its stated goal to amass 105,000 BTC by 2027, which would represent approximately 0.5% of Bitcoin's total fixed supply. To achieve this ambitious target, Semler intends to utilize a combination of equity, debt financing, and operational cash flow.
The company's strategic shift towards Bitcoin is financed partly through an "at-the-market" (ATM) equity offering program. Through this program, Semler has issued and sold 4,466,449 shares of common stock, generating net proceeds of roughly $175 million. While this provides capital for Bitcoin acquisitions, it also leads to shareholder dilution, potentially contributing to the stock's lackluster performance.
Several factors may explain why Semler Scientific's stock price has not responded positively to its Bitcoin strategy. One key reason is the potential dilution of shareholder value caused by the ongoing equity offerings used to fund Bitcoin purchases. As the company issues more shares, the ownership stake of existing shareholders is reduced, which can depress the stock price. Additionally, concerns about Semler's core business performance could be weighing on investor sentiment. Semler Scientific reported a net loss of $64.7 million for the first quarter of 2025, with revenue declining 44% year-over-year to $8.8 million. These financial results indicate challenges in the company's primary operations, overshadowing any potential gains from its Bitcoin investments.
Another element to consider is the inherent volatility associated with Bitcoin. While Semler has seen unrealized gains on its Bitcoin holdings, these gains can quickly evaporate if the price of Bitcoin declines. This volatility introduces an element of risk and uncertainty that may make some investors wary. The company's financial health score is rated as "GOOD," despite facing some liquidity challenges with a current ratio of 0.52.
Despite the stock's recent struggles, Semler Scientific remains committed to its Bitcoin strategy, appointing Joe Burnett as its "director of Bitcoin strategy" to spearhead its Bitcoin-buying plan. The company highlights its "BTC Yield" as a key performance indicator, measuring the percentage change in its Bitcoin holdings compared to its diluted share count. As of July 16, the company reported a year-to-date BTC Yield of 30.3%. Semler Scientific's next earnings report is scheduled for August 11, 2025, which will provide further insights into the company's financial performance and the impact of its Bitcoin strategy.
