Semler Scientific Unusual Bitcoin Bet: A Medical Device Company High-Stakes Gamble

Here’s why Semler Scientific’s stock soared last month and how its crypto gamble is reshaping its market perception.

Semler Adds Bitcoin to Its Balance Sheet

Semler Scientific’s October stock surge wasn’t tied to its healthcare business performance; in fact, there was no notable update from its core operations. The driver of the spike? Management decided to allocate a significant portion of the company’s liquid assets into Bitcoin, riding the cryptocurrency’s recent climb to over $72,000, close to an all-time high.

In its latest quarterly report, Semler disclosed it now holds 1,058 Bitcoin, valued at approximately $76 million at the recent $72,000 price. With Semler’s current market cap at $219 million, Bitcoin now accounts for around 35% of the company’s valuation. As a result, if Bitcoin continues to appreciate, Semler’s stock could rise in tandem—essentially giving the company a growth lever beyond its medical device business.

The State of Semler’s Healthcare Business

Although Semler has embraced Bitcoin, its main business remains healthcare, specifically through its Quantaflo product, which targets the peripheral artery disease (PAD) market. Despite Bitcoin’s impact on stock performance, Semler’s core operations face challenges. Over the last 12 months, its medical division generated $61.7 million in revenue, but third-quarter revenue fell 17% year-over-year—a worrisome signal for shareholders concerned about growth sustainability.

The revenue dip is notable, yet Semler still manages to post positive operating income. For the most recent quarter, operating income reached $5.1 million, contributing to $22 million over the past year. However, a downturn in core revenue has prompted Semler to explore Bitcoin investments as an alternative income source, creating a new risk profile for the company.

A High-Stakes Strategy with Bitcoin

Semler’s pivot toward Bitcoin introduces both potential upside and considerable risk. Bitcoin’s inherent volatility means Semler’s stock performance could increasingly fluctuate with crypto market trends. The medical device division remains profitable, but revenue declines underscore the potential volatility and the need for operational stability.

For investors, Semler’s foray into Bitcoin represents a bold shift in strategy that could yield gains but also entails high risk.