On Tuesday, Semler Scientific, Inc. (Nasdaq: SMLR), a medical software program firm, introduced that it had bought 581 bitcoins for roughly $40 million as a part of its “bitcoin treasury technique.”
Within the wake of the announcement, some paralleled the corporate’s technique to MicroStrategy’s, which has entailed changing virtually all of its treasury into bitcoin.
Caught my 👀
Right this moment Semler Scientific introduced a #bitcoin Treasury technique much like Microstrategy @saylor
– acquired $BTC 8% of enterprise worth
– 5X EV/EBITDA
– 8X P/E ratio
A #smallcap model of $MSTR and $SMLR is within the Russell 2000 $IWM ?https://t.co/5RGbreCTaj pic.twitter.com/vajSZM4zUz
— Thomas (Tom) Lee (not drummer) FSInsight.com (@fundstrat) Might 28, 2024
“I could not assist however discover what MicroStrategy completed,” Semler Scientific Chairman Eric Semler advised Bitcoin Journal.
“It is wonderful what they’ve finished. They’ve this nice story of taking an organization that was mainly buying and selling on the market worth — its money was its full worth — and simply turning that money right into a development asset by way of their purchases of Bitcoin,” he added.
“It was an excellent transfer on Michael Saylor’s half, and he is clearly confirmed himself with that technique.”
Whereas Semler clearly admires Saylor’s daring transfer, he acknowledged that Semler Scientific will method including bitcoin to his firm’s treasury in a method that works greatest for the corporate, as he acknowledged that Semler Scientific doesn’t plan to stray from its core mission — producing high-quality medical software program — because it adopts bitcoin as its major treasury asset.
“It’s important to go slowly and simply determine what the proper method for you as an organization is,” mentioned Semler.
With that mentioned, Semler appears to be a real Bitcoin believer.
“Philosophically, I see advantage within the argument that bitcoin is a extremely nice various to gold,” he mentioned. “I imagine in gold, however I imagine that bitcoin is type of gold with optionality.”
He went on to state how he appreciates Bitcoin’s excellent shortage, its technical sturdiness and its “architectural resilience.”
He additionally sees the writing on the wall in that Bitcoin is a expertise that the millennial era is embracing, whereas bitcoin the asset nonetheless solely has roughly one tenth of the market capitalization of gold.
“I’ve develop into a believer, and coinciding with that perception, I assumed, perhaps shopping for bitcoin is a extremely good use of our extra money.”
And Semler Scientific has been flush with extra money, as its a “very high-margin enterprise,” in accordance with Semler.
After contemplating choices like inventory buybacks or investing the money within the firm’s treasury to earn a yield, Semler and his board arrived on the thought of utilizing a notable portion of the money to purchase bitcoin.
Nicely-versed in capital markets in addition to in investing in small- and mid-cap (SMID-cap) companies — firms like Semler Scientific itself, which has a market cap of about $227 million — Semler is aware of that SMID-cap firms must do one thing in the event that they need to stand out to traders.
“It takes quite a bit for a SMID-cap firm to get the eye of traders,” defined Semler.
“When you are able to do one thing dynamic — like spend money on digital gold when not quite a lot of different persons are doing it — that’s significant and vital,” he added.
“If I had been an investor, I’d take a more in-depth look simply because it’s differentiated.”
Semler Scientific’s inventory is at the moment buying and selling at simply over $32, roughly 50% larger than it was buying and selling earlier than its bitcoin treasury announcement.