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Semler Scientific’s Bitcoin bet sends shares up 43%
Shares of Scientific Semler (NASDAQ:SMLR) skyrocketed Tuesday. Shares of the medical device maker peaked with a 43.1% daily gain as of 2:15 pm ET, boosted by a new cash management strategy. More to the point, Semler’s new treasury plan is all about it Bitcoin (CRYPTO: BTC) instead of cash.
Why Semler Scientific chose Bitcoin over cash
In a morning press release, Semler said he looked at various treasury strategies and settled on a heavy investment in Bitcoin. With $62.8 million in liquidity at the end of March, the company purchased 581 bitcoins for a total of $40 million. This is an average price of around $68,850 per Bitcoin, more or less in line with current market prices.
Management explained that Bitcoin appears to be “a reliable store of value and an attractive investment.” They like it the inherent scarcity of cryptocurrency, making it a safe bet in the context of global inflation trends. President Eric Semler also made a favorable comparison to Bitcoin physical goldwhose global market value is approximately 10 times that of Bitcoin.
“Given the value gap between gold and bitcoin, we believe bitcoin has the potential to generate exceptional returns as it gains growing acceptance as digital gold,” Semler said.
He also highlighted Bitcoin’s growing stature in institutional investing, bolstered by the recent approval of Bitcoin spot Exchange Traded Funds (ETFs).
Juggling cryptocurrency investments with the medical device business
Elsewhere in the announcement, Semler leaders reminded investors that the company’s goal is to fight 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 Bitcoin idea doesn’t make Semler a cryptocurrency investment – it’s just an effort to protect and perhaps increase Semler’s long-term cash reserves.
But investors see an echo of the enterprise software maker MicroStrategy (NASDAQ: MSTR) here. The software business is still active but largely ignored by market makers, effectively making MicroStrategy a straight play on the future of Bitcoin. Semler is following the same uncharted path.
Only a handful of companies own more Bitcoin than Semler Scientific, especially if you exclude cryptocurrency specialists like Bitcoin mining experts. And Semler is a microcap stock with a market value 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 stock will likely rise and fall along with Bitcoin’s price movements from this point on, for better or worse.
The story continues
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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