Semler Scientific shares up 30% after adopting Bitcoin as treasury reserve

Nasdaq-listed Semler Scientific (SMLR) saw its stock price soar by 30% on May 28 after announcing that Bitcoin will become its primary treasury reserve asset. As part of the strategy, the company purchased 581 Bitcoin for a total of $40 million.

“Our bitcoin treasury strategy and purchase of Bitcoin underscore our belief that bitcoin is a reliable store of value and a compelling investment,” said Eric Semler, Semler Scientific’s chairman.

The executive is also president of the investment fund TCS Capital Management, primarily known for its activist investment strategies, targeting companies like the crowdsourced reviews platform Yelp. The fund does not appear to have any direct or indirect exposure to Bitcoin.

“We believe it has unique characteristics as a scarce and finite asset that can serve as a reasonable inflation hedge and safe haven amid global instability,” Semler said about the Bitcoinstrategy.

SMLR performance on May 28. Source: Google Finance

Semler provides technology devices and software for healthcare providers. According to its latest earnings report, the company generated $15.9 million in revenue in the first quarter of 2024, down 13% from the same period last year. However, net income increased by 22%, reaching $6.1 million. At the end of March, Semler’s balance sheet showed $83.86 million in assets.

The company’s board of directors and senior management reportedly spent “substantial time” examining potential uses for its cash reserves, including evaluating acquisition opportunities, according to the statement. The chairman continued:

“After studying various alternatives, we decided that holding Bitcoin would be the best use of our excess cash.”

According to the executive, Bitcoin’s architectural resilience makes it preferable to gold. “Given the gap in value between gold and bitcoin, we believe that bitcoin has the potential to generate outsize returns as it gains increasing acceptance as digital gold,” he noted.

MicroStrategy (MRST), the largest corporate holder of Bitcoin, also uses BTC as a primary reserve asset. As of March 31, MicroStrategy owned 214,400 Bitcoin, worth $13.5 billion, bought at an average price of $35,180.

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