Strive Asset Management is acquiring Semler Scientific at a $1.3 billion valuation, the company said on Monday, growing its Bitcoin holdings by snapping up a competitor that has come under pressure in a strategy that some analysts predict could become more common.
The Texas-based financial services firm, which was co-founded by Republican Ohio gubernatorial candidate Vivek Ramaswamy, said in a press release that it is acquiring Semler though an all-stock deal at $90.52 per share, while gaining 5,000 Bitcoin that Semler owns.
Once the deal is completed, Strive expects to own 10,900 Bitcoin, which would be worth roughly $1.2 billion, based on current prices. On Monday, Strive said it had also recently purchased 5,816 Bitcoin after owning just 69 Bitcoin previously.
Semler shares jumped more than 11% on Monday to $32.28, according to Yahoo Finance. Still, the company’s stock price has dipped 35% from $50.46 since the healthcare technology firm telegraphed its first Bitcoin purchase in early February.
Strive itself adopted Bitcoin as a treasury reserve asset in May, while merging with Asset Entities. On Monday, the firm’s stock price fell 6% to $4 but remains up 700% year-to-date.
As the market increasingly becomes saturated with Bitcoin-buying firms, some experts have described a wave of consolidation as inevitable, especially as investors show signs of souring on some companies. In fact, Semler’ stock was trading at a discount to its Bitcoin holdings prior to Monday.
Why Are So Many Public Companies Pivoting to Crypto, And What Happens If Bitcoin Crashes?
Last week, TD Cowen analyst Lance Vitanza identified Semler’s discount as “meaningful.” It constrained a key funding mechanism, as Bitcoin treasury firms often grow the amount of Bitcoin they own per share by issuing common stock at a premium to their Bitcoin holdings.
Matthew Sigel, head of digital assets research at VanEck, told Decrypt in June the Semler was in a position that many Bitcoin treasury firms “may find themselves in the coming quarters: trading close to NAV and facing pressure to demonstrate capital discipline.”
Other experts have said that struggling Bitcoin treasury firms are key targets for buying Bitcoin at a discount. Strive’s deal, however, represented a 210% premium to Semler’s value.
In June, Strive CEO Matt Cole told Decrypt that the firm was “watching these companies and what they’re doing like a hawk,” sensing there could be an opportunity to step in as a buyer, but it wasn’t something foreseeable in the immediate future.
“I’m not sitting here saying, ‘Today we need to be prepared to acquire 10 different Bitcoin Treasury companies that are going to blow up in the next six months,’” he said at the time. “I think there’s a good likelihood that that could be a view that we have in the future.”