h2>Significant Market Reaction
Medical device manufacturer Semler Scientific (SMLR) experienced a notable drop in its stock price, falling as much as 15% after the U.S. market closed on Thursday. This decline follows the company’s announcement regarding a planned sale of $75 million in convertible senior notes. In an intriguing twist, the company revealed that part of the raised funds would be allocated to increasing its bitcoin (BTC) holdings.
h2>Fourth-Quarter Performance Highlights
Despite the stock’s decline, Semler Scientific reported a modest growth in its fourth-quarter financials. Revenue rose by 3.3%, reaching $12.5 million, while operational income saw an increase of 8.8%, totaling $3.7 million. Notably, the company also reported an unrealized gain of approximately $29 million stemming from fluctuations in the fair value of its bitcoin investments.
h2>Details of the Convertible Note Offering
The proceeds from the convertible note offering will not only support the company’s bitcoin investments but will also be partially utilized for capped-call transactions. These transactions are designed to mitigate potential stock dilution that may arise from the conversion of the notes. The offering includes an option for an additional $15 million, enhancing the total potential funding.
h2>Maturity and Conversion Options
The convertible notes are set to mature in 2030, with interest payments scheduled to occur semiannually. Investors will have the flexibility to convert the notes into cash, shares of the company, or a combination of both. However, the full terms of the offering are yet to be disclosed, leaving some details pending clarification.
h2>Bitcoin Holdings Update
As of January 17, Semler Scientific holds a substantial 2,321 BTC, with a cumulative purchase price of $191.9 million. This reflects an average purchase price of approximately $82,689 per bitcoin, underscoring the company’s significant investment in the cryptocurrency market amidst its core business operations.
Overall, while Semler Scientific experienced a market tumble, its financial and strategic moves indicate a complex interplay between traditional medical device manufacturing and emerging digital asset investments.
