Semler Scientific Inc. (NASDAQ: SMLR) faces heightened market scrutiny as its enterprise value converges with its Bitcoin treasury holdings, underscoring strategic pressures for companies adopting cryptocurrency reserves. With a multiple-to-net asset value (mNAV) of 1.07, the firm’s market capitalization hovers just 7% above the $466 million valuation of its 4,449 Bitcoin holdings.
The narrow mNAV margin poses challenges to the company’s core Bitcoin treasury strategy, which aims to grow shareholder value by accumulating BTC reserves per share. When mNAV falls below one, firms like Semler struggle to raise capital for expanding Bitcoin holdings without diluting shareholder value. Following its recent purchase of 185 Bitcoin for $20 million, Semler may seek to raise up to $364 million via an at-the-market (ATM) equity offering to fund further Bitcoin acquisitions.
Industry analysts suggest implementing protective measures against valuation risks, including suspending ATM issuances if shares trade below 0.95 times net asset value and prioritizing buybacks during Bitcoin price rallies. The strategy faces additional headwinds from a tentative $30 million settlement with the U.S. Department of Justice and a 6.5% stock price decline that pushed shares to $28.30.