(Kitco News) – Michael Saylor’s strategy of buying Bitcoin (BTC) with the funds available in MicroStrategy’s treasury and pitching other companies to do the same is starting to have an effect as the board of directors at Semler Scientific, a pioneer in developing and marketing technology products and services to healthcare providers to combat chronic diseases, have announced the adoption of Bitcoin as the company’s primary treasury reserve asset.
Semler Scientific first announced the decision on May 28, which included the purchase of 581 Bitcoins for an aggregate amount of $40 million, including fees and expenses. But they weren’t done there, as Thursday saw the firm announce the purchase of an additional 247 Bitcoins for $17 million in cash.
The firm now holds 828 bitcoins, which were acquired for an aggregate of $57 million, including fees and expenses.
“Our Bitcoin treasury strategy and purchase of Bitcoin underscore our belief that Bitcoin is a reliable store of value and a compelling investment," said Eric Semler, Chair of Semler Scientific. “Bitcoin is now a major asset class with more than $1 trillion of market value. We believe it has unique characteristics as a scarce and finite asset that can serve as a reasonable inflation hedge and safe haven amid global instability.”
Semler added that his company believes Bitcoin’s “digital, architectural resilience makes it preferable to gold, which has a market value of approximately 10 times that of Bitcoin. Given the gap in value between gold and Bitcoin, we believe that Bitcoin has the potential to generate outsize returns as it gains increasing acceptance as digital gold.”
Another aspect that influenced the decision is “the growing global acceptance and 'institutionalization' of Bitcoin – reflected most recently by the Securities and Exchange Commission's (SEC) January 2024 approval of 11 Bitcoin exchange-traded funds,” he added. “These funds have reported more than $13 billion of net inflows, with investments from nearly 1,000 institutions, including global banks, pensions, endowments, and registered investment advisors. It is estimated that more than 10% of all Bitcoins are now held by institutions.”
Semler noted that the company’s board and senior management didn’t make the decision lightly and spent a substantial amount of time examining potential uses of cash, including acquisitions. "After studying various alternatives, we decided that holding Bitcoin would be the best use of our excess cash,” he said.
While some have pointed to the route Microstrategy has taken since first adopting Bitcoin as a reserve asset, which has refocused the company's primary objectives, Doug Murphy-Chutorian, MD, Semler Scientific's chief executive officer, said the firm will continue to focus on its core medical products and services.
“We remain dedicated to our customers and our goal of operating a growing and profitable healthcare company," Murphy-Chutorian said. “We are focused on maintaining sales of QuantaFlo® for peripheral arterial disease testing, while seeking a new 510(k) clearance from the FDA with expanded labeling for use as an aid in the diagnosis of other cardiovascular diseases.”
After the second tranche of Bitcoin was purchased, Murphy-Chutorian reiterated Semler Scientific’s dedication to expanding its healthcare offerings, but also noted a secondary goal pertaining to its Bitcoin strategy.
“Semler remains focused on our two strategies of expanding our healthcare business and acquiring and holding Bitcoin," he said. “The company now holds 828 Bitcoins, underscoring our view that Bitcoin is a compelling investment and can serve as a reliable store of value. We will continue to pursue our strategy of purchasing Bitcoins with cash.”
According to an S-3 filing with the SEC, the firm isn’t wasting any time ramping up its Bitcoin strategy. They announced plans to raise an additional $150 million via debt securities and will use a portion of the proceeds to buy more BTC.
“We intend to use the net proceeds from the sale of any securities offered under this prospectus primarily for general corporate purposes, including the acquisition of Bitcoin,” the firm wrote. “General corporate purposes may include working capital and capital expenditures, research and development expenses, general and administrative expenses and potential acquisition of, or investment in, companies, technologies, products or assets that complement our business, as well as the acquisition of Bitcoin.
“We have not determined the amount of net proceeds to be used specifically for such purposes,” they added. “As a result, management will retain broad discretion over the allocation of the net proceeds of any offering.”
