In a major milestone for the medical device maker’s pioneering bitcoin strategy, options trading is now available for shares of Semler Scientific (SMLR). The development comes as Semler’s stock has nearly tripled since announcing its initial BTC purchases in May, with its bitcoin holdings now topping $220 million.
Semler’s Bitcoin Bet Pays Off
When Semler Scientific first revealed it had begun allocating capital to bitcoin on May 28th, it marked a bold departure from the typical treasury management practices of a publicly traded company. But the medical technology firm’s conviction in the long-term value proposition of the original cryptocurrency is already bearing fruit.
In the ensuing months, Semler’s stock price has skyrocketed by nearly 200%, lifting its market capitalization above $600 million. The company has supplemented its initial BTC buys with additional purchases funded through share offerings. All told, Semler has acquired 2,084 bitcoin at an average cost basis of around $81,000 each – a trove now worth roughly $222 million with BTC trading near $106,500.
Our move into bitcoin represents a new paradigm in corporate treasury management that we believe will provide significant long-term value for our shareholders. The early validation from the market underscores we’re on the right track.
an executive familiar with Semler’s bitcoin strategy told us
Enter Options Trading
With Semler’s shares now changing hands above $74 – nearly tripling its price prior to the bitcoin buys – the stock has met key thresholds enabling options trading. The introduction of SMLR options gives investors new instruments to manage risk and speculate on the equity’s future prospects.
Options are derivative contracts providing the right, but not obligation, to buy or sell shares at predetermined prices by certain expiration dates. For a company to have listed options, its stock typically must maintain a minimum price and market cap, demonstrate ample liquidity, and have a sufficient number of outstanding shares.
Semler had formally requested options listing from exchanges on December 5th, believing it now satisfied all eligibility criteria. Though pending official announcement, the options became available for trading across brokerage platforms Tuesday morning. Semler shares popped another 5% in pre-market activity on the news to $78.20.
Following MicroStrategy’s Lead
In adopting bitcoin as a treasury reserve asset, Semler is taking a page from the corporate playbook pioneered by software intelligence firm MicroStrategy. The latter now holds over 130,000 BTC – making it a de facto bitcoin proxy stock – and has employed various capital raising methods to acquire more, including convertible note offerings.
Having a robust options market helps make potential future convertible debt issuances more attractive, as buyers can more readily hedge their positions. This optionality could prove valuable if Semler pursues a similar funding model as it continues building out its bitcoin position on the balance sheet.
Signaling a Trend?
Semler’s bitcoin moves are part of a small but growing contingent of public companies adding BTC to their treasuries. The trend gained steam in 2021 after electric vehicle maker Tesla purchased $1.5 billion worth of the cryptocurrency. More recently, enterprise software maker Palantir converted $50 million of its balance sheet cash into bitcoin.
While the overall scope of corporate adoption remains limited, high-profile success stories like Semler’s could entice more firms to consider bitcoin allocations. Beyond just a vehicle for balance sheet diversification, bitcoin is increasingly seen as having inherent synergies with certain business models and as a beacon for digitally savvy clientele.
We foresee many more companies, particularly those with strong technology DNAs, integrating bitcoin into their operations and core value propositions in the years to come. Semler is on the vanguard of this disruptive trend.
a corporate treasury consultant told us on condition of anonymity
As for Semler, its bitcoin gambit and the associated windfall have transformed the once sleepy medical equipment stock into one of the most captivating stories in both biotech and crypto. Legitimized further by the advent of options trading, Semler’s equity now appears poised to be a leading bellwether of the ongoing convergence between the worlds of traditional finance and bitcoin.
