In a bold move that sent its stock price skyrocketing, medical device company Semler Scientific Inc. announced that it had allocated a significant portion of its cash reserves to Bitcoin (BTC).
According to Bloomberg, the San Jose, California-based company purchased 581 Bitcoins for a total of $40 million, including fees and expenses.
Semler Scientific transfers its cash reserves to Bitcoin
With this purchase, Semler Scientific became one of the few public companies to adopt Bitcoin as its primary treasury asset, following the example of the enterprise software company. MicroStrategy.
According to report and Semler Scientific President Eric Semler, the decision underscores the company’s belief in BTC’s potential as a “reliable store of value” and “compelling investment.” Semler added:
We believe that Bitcoin has unique characteristics as a scarce and limited asset that can serve as a reasonable hedge against inflation and a safe haven amid global instability. We also believe its digital and architectural resilience makes it preferable to gold, whose market value is approximately 10 times that of Bitcoin.
Semler Scientific’s shift to Bitcoin comes as the company seeks to optimize its cash surplus, which stood at $62.9 million as of March 31, 2024. The funds were previously held in a combination of non-bearing bank accounts. interest, Treasury bills and government securities. money market fund. Semler added:
After investigating various alternatives, we decided that holding Bitcoin would be the best use of our excess cash. We remain committed to our core medical products and services, but believe this Bitcoin purchase strategy can also contribute to long-term value creation for our shareholders.
BTC triggers 36% surge in Semler Scientific stock price
According to the report, the company’s decision has already paid off, as Semler Scientific has stock price climbing as much as 36% to $31.61 on the news, increasing its market value to around $220 million. This stands in stark contrast to the stock’s nearly 50% decline so far this year, prior to the Bitcoin announcement.
Semler Scientific’s decision to allocate a significant portion of its treasury to Bitcoin follows in the footsteps of MicroStrategy, which has established itself as one of the the largest shareholders cryptocurrency.
MicroStrategy’s Bitcoin holdings now exceed $10 billion and the company is funding purchases using cash flow, equity and debt sales.
As Semler Scientific continues to generate revenue and free cash flow from its medical products, the company says it will regularly evaluate the use of its excess cash, including possible additional investments in BTC or other “strategic initiatives”.
At the time of writing, BTC is trading at $68,100, down 2.4% in the last 24 hours.
Featured image from Shutterstock, chart from TradingView.com
