Key Points
- Semler Scientific’s market net asset value (mNAV) hovered near 1.0 during regular trading Tuesday, indicating its market capitalization is only very slightly above the value of its Bitcoin holdings.
- A Bitcoin treasury company can increase its Bitcoin per share only if its mNAV remains above one, allowing stock sales to fund Bitcoin purchases. A drop below one constrains this strategy.
Nasdaq-listed firm Semler Scientific saw its stock trade at a slight premium to its substantial Bitcoin treasury holding on Tuesday. The company’s market net asset value (mNAV) metric settled near 1.07. Notably, the firm’s enterprise value of $498.5 million stood marginally above the market cap value of its 4,449 Bitcoin, worth approximately $466 million.
According to VanEck’s digital assets research head, Matthew Sigel, “Semler is now in a position where many Bitcoin treasury companies may find themselves: trading close to NAV and facing pressure to demonstrate capital discipline.”
Semler’s stock price closed down 6.5% on Tuesday, reaching $28.30, making it one of the top ten Bitcoin treasury companies by dollar value. Mr. Sigel added that Semler’s leadership can implement measures to stabilize its mNAV around current levels if shareholder interests are prioritized. These measures could include pausing secondary offerings if the stock dips below NAV and holding off buybacks when Bitcoin prices decrease.
The mNAV metric has gained focus among professionals comparing Bitcoin treasury firms, though Semler has been participating in this space since 2023. Earlier this month, the company acquired 185 BTC for $20 million and indicated a potential ATM offering.
The company faces scrutiny beyond its digital assets operations. It is currently evaluating a $30 million settlement with the US Department of Justice regarding a historical product marketing issue, and a securities investigation by Rosen Law Firm has been announced. These factors, alongside its small market cap and operational issues, may be contributing to its current market valuation.
Concerns remain among market observers about the implications should Bitcoin’s price significantly drop. Such a decline could force companies like Semler to liquidate portions of their Bitcoin reserves to meet financial obligations or shareholder expectations, counteracting the buying pressure observed so far this year.