Semler Scientific bought another $25 million in Bitcoin to push its holdings to nearly 5,000 BTC, but investors aren't buying into the buzz. Even with its treasury strategy and big gains on its crypto investments, the medical technology company’s shares are down 22% year-to-date.
Semler bought 210 Bitcoin (BTC) in the first week of July at an average price of $118,974 per coin, according to a filing with the US Securities and Exchange Commission (SEC). The company now holds 4,846 Bitcoin, acquired for almost $455 million and now worth $577.9 million.
The shift from medical technology business to the Bitcoin treasury company is backed by a $175 million capital raise through an at-the-market (ATM) offering in April. The company plans to hold 105,000 BTC by 2027. If Semler achieves its goal, it would hold 0.05% of all BTC that would ever be produced.
The company’s share price has not responded positively to the aggressive crypto move. According to Google Finance, the share price is down 18.7% year to date, up 2.7% on the day at time of writing.
“The lackluster price performance of Semler Scientific shows that simply pivoting to a Bitcoin strategy isn't a panacea for all business troubles,” crypto analyst Nic Puckrin told Cointelegraph.
According to the analyst, the company's reliance on selling shares to finance its BTC buying could be playing a role in investors’ sentiment.
“This dilutes shareholder value, so it makes sense they aren't that thrilled, especially considering its Q2 earnings report was underwhelming,” Puckrin said. “Not all Bitcoin treasury companies will be able to replicate Strategy's success.”
Strategy, the first publicly traded company to bet on a Bitcoin corporate reserve, added over $472 million worth of BTC to its growing stash. The company now holds more than 601,550 BTC.
Related: Semler Scientific boosts Bitcoin reserve with $20M BTC top-up
Semler Scientific faces legal inquiries after DOJ settlement
Semler Scientific is facing legal inquiries related to its settlement discussions with the US Department of Justice. At least two law firms, Rosen Law Firm and the Law Offices of Howard G. Smith, have recently issued press releases encouraging investors to reach out for potential claims.
The issue appears to be related to Semler Scientific’s February disclosure of its settlement discussions with the DOJ about a possible violation of anti-fraud law relating to the company’s QuantaFlo product, according to a March report. After the disclosure, Semler's stock price fell 9.4%, according to the law firms.
In April, the company said it had reached an agreement in principle with the DOJ to settle for $29.8 million.
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