Bitcoin
Semler Scientific’s Bitcoin Bet Sends Shares Up 43%
Actions of Semler Scientific (NASDAQ: SMLR ) soared on Tuesday. The medical device maker’s shares hit a single-day peak gain of 43.1% at 2:15 pm ET, driven by a new cash management strategy. More precisely, Semler’s new treasury plan is all about Bitcoin (CRYPTO: BTC) instead of cash.
Why Semler Scientific chose Bitcoin over cash
In a press release issued early this morning, Semler said he examined several treasury strategies and decided to make a heavy investment in Bitcoin. With $62.8 million in cash reserves at the end of March, the company purchased 581 bitcoins for a total of $40 million. This is an average price of approximately $68,850 per Bitcoin, roughly in line with current market prices.
Management explained that Bitcoin appears “a reliable store of value and an attractive investment.” They like the inherent scarcity of cryptocurrency, making it a safe bet amid global inflation trends. President Eric Semler also gave Bitcoin a favorable comparison with physical goldwhose global market value is about 10 times that of Bitcoin.
“Given the difference in value between gold and bitcoin, we believe bitcoin has the potential to generate outsized returns as it gains increasing acceptance as digital gold,” Semler said.
He also highlighted Bitcoin’s growing stature in institutional investments, driven by the recent approval of spot Bitcoin exchange-traded funds (ETFs).
Juggling crypto investments and the medical device business
Elsewhere in the announcement, Semler leaders reminded investors that the company’s goal is to combat chronic disease. Its flagship product, the QuantaFlo blood flow testing device, may soon expand its medical clearance to include the diagnosis of cardiovascular disease. The idea of Bitcoin does not make Semler an investment in cryptocurrency – it is merely an effort to protect and perhaps increase Semler’s cash reserves in the long term.
But investors see an echo of the enterprise software maker Microstrategy (NASDAQ: MSTR) here. The software business is still active but is largely ignored by market makers, making MicroStrategy a direct bet on Bitcoin’s future. Semler is following the same unknown path.
Only a handful of companies own more Bitcoin than Semler Scientific, especially if you exclude crypto experts like Bitcoin mining experts. And Semler is a microcap stock with a market cap of just $213 million today – after the Bitcoin-based jump.
In other words, Semler Scientific just became a crypto stock, despite management’s assurance that the core business remains 100% medical. This action will likely rise and fall along with Bitcoin’s price movements from this point forward, for better or worse.
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Anders Bylund has positions in Bitcoin. The Motley Fool has positions and recommends Bitcoin and Semler Scientific. The motley fool has a disclosure policy.
Semler Scientific’s Bitcoin Bet Sends Shares Up 43% was originally published by The Motley Fool