Semler Scientific has invested $40 million in Bitcoin, leading to a 25% increase in its stock price.
In a significant move within the healthcare technology sector, Semler Scientific has shifted its treasury strategy to primarily include Bitcoin. The company revealed on Tuesday that it has acquired 581 Bitcoin for a total investment of $40 million, a decision that spurred a 25% increase in its stock price during early U.S. trading hours.
Before the surge, Semler Scientific, a company valued at under $200 million, reported having cash and cash equivalents of $62.9 million at the end of the first quarter, along with $15.9 million in revenue and $6.1 million in operating cash flow, as stated in its most recent earnings statement.
Chairman Eric Semler justified the investment, saying, "Bitcoin is now a major asset class with more than $1 trillion of market value," and highlighted its qualities as "a scarce and finite asset that can serve as a reasonable inflation hedge and safe haven amid global instability."
The press release from the Santa Clara-based company, dated May 28, 2024, emphasized the belief that Bitcoin provides a reliable store of value and an attractive investment opportunity. Eric Semler added, "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." Semler also noted the "growing global acceptance and 'institutionalization' of Bitcoin," with the Securities and Exchange Commission's January 2024 approval of 11 Bitcoin exchange-traded funds as a recent example of this trend.
Despite the foray into Bitcoin, Semler Scientific's CEO, Doug Murphy-Chutorian, MD, assured that the company would continue to prioritize its core medical products and servicess.
The company's stock, which experienced a 25% gain following the announcement, has now almost entirely recovered from its year-over-year decline, now sitting at just a 2% decrease.
This move by Semler Scientific reflects a broader corporate trend of integrating Bitcoin into traditional financial strategies, potentially setting a precedent for other small-cap companies to follow. Bitcoin will remain the principal holding of Semler Scientific's treasury, subject to ongoing market conditions and the company's operational cash needs.
