In a bold move that has sent its stock price soaring, medical device company Semler Scientific Inc. has announced that it has allocated a significant portion of its cash reserves to Bitcoin (BTC). 

According to Bloomberg, the San Jose, California-based firm purchased 581 Bitcoin for a total of $40 million, including fees and expenses.

With the purchase, Semler Scientific has become one of the few public companies to adopt Bitcoin as a primary treasury asset, following the lead of enterprise software firm MicroStrategy. 

According to the report and Semler Scientific’s chairman, Eric Semler, the decision underscores the company’s belief in BTC’s potential as a “reliable store of value” and “compelling investment.” Semler further stated:

We believe Bitcoin has unique characteristics as a scarce and finite asset that can serve as a reasonable inflation hedge and safe haven amid global instability. We also believe its digital, architectural resilience makes it preferable to gold, which has a market value of approximately 10 times that of Bitcoin.

Semler Scientific’s shift towards Bitcoin comes as the company seeks to optimize its excess cash, which stood at $62.9 million as of March 31, 2024. The funds were previously held in a mix of non-interest-bearing bank accounts, Treasury bills, and government money market funds. Semler added:

After studying 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.

Per the report, the company’s move has already paid dividends, with Semler Scientific’s stock price soaring as much as 36% to $31.61 on the news, boosting its market value to around $220 million. This starkly contrasts the stock’s nearly 50% decline so far this year before 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 emerged as one of the largest corporate holders of the cryptocurrency. 

MicroStrategy’s Bitcoin holdings now exceed $10 billion, and the company funds the 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 potential further investments in BTC or other “strategic initiatives.”

As of this writing, BTC is trading at $68,100, down 2.4% in the past 24 hours. 

Featured image from Shutterstock, chart from TradingView.com 

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