Simply put
- Semler Scientific’s MNAV dipped to one on Tuesday.
- When MNAV drops below one, increasing Bitcoin per share becomes challenging for companies.
- Matthew Sigel from Vaneck mentioned that the company can still “stabilize value.”
Semler Scientific, a healthcare tech firm listed on NASDAQ, was assessed to have a slight premium compared to Bitcoin Holdings on Tuesday.
The current valuation for Semler’s MNAV, or managed net asset value, is at 1.07. This means that the company’s corporate value is $498.5 million, which has edged up its market cap and cash balance to around $466 million, equating to roughly 4,449 Bitcoin.
Matthew Sigel, who leads digital asset research at Vaneck, noted that “Semler is currently in a position where many Bitcoin finance companies may find themselves in the upcoming quarter,” indicating they are under pressure to trade near NAV while showing capital discipline.
I did reach out to Semler for further comments.
Firms like Semler, which hold Bitcoin treasuries, are working to enhance shareholder value by increasing Bitcoin per share. If a company’s MNAV falls under one, they can’t boost Bitcoin per share by selling stocks to fund Bitcoin purchases.
When Semler revealed its latest Bitcoin investment, the company announced it had acquired 185 Bitcoin for $20 million. They also indicated their capability to sell $364 million worth of common stock via their market delivery program.
In a recent conversation with Ben Werkman, the CIO at Swan Bitcoin, I pointed out that such discounts could surprise investors if they think the company can no longer secure funds that would benefit shareholders.
“The company has several strategic levers to stabilize its value,” Sigel remarked. “If management focuses on shareholders, the risk-reward ratio at this level looks favorable.”
On X, previously known as Twitter, Sigel mentioned that Bitcoin finance companies might need to implement safeguards, like halting ATM issuances if shares trade below 0.95 times their net asset value, among other strategies to prioritize shareholder interests.
Recently, MNAV has gained traction as a benchmark for evaluating Bitcoin finance companies. Interestingly, Semler isn’t a recent player, as they made their initial Bitcoin purchase in May last year.
Back in April, Semler disclosed a provisional $30 million settlement with the US Department of Justice due to allegations of violations related to the marketing of their Quantaflo product. Following this, the Rosen Law Firm announced an investigation into potential securities claims on behalf of shareholders.
On Tuesday, Semler’s stock price dropped by 6.5% to $28.30. The firm currently holds the tenth largest Bitcoin treasury by dollar value, trailing behind GameStop.
Shigeru pointed out on X that “greater legacy business issues” could be negatively impacting Semler’s MNAV, along with its small market cap, low liquidity, and limited issuance of convertible debt.
Some analysts have cautioned that companies might be pressed into selling Bitcoin if prices decline significantly.
