Semler Scientific Sees Decline After Convertible Note Offering and Earnings Results Post-Market

Semler Scientific (SMLR), a medical device company, experienced a sharp 15% decline in its stock price after U.S. market hours on Thursday following the announcement of a $75 million offering of convertible senior notes. Part of the proceeds from this offering will be used to bolster the company’s bitcoin (BTC) holdings.

The company’s stock price dropped to as low as $51, and it continued to show an 8% decline in pre-market trading. Semler, based in Santa Clara, California, raised the total offering size to $85 million, including a $15 million over-allotment option. The notes, maturing in 2030, carry a 4.25% annual interest rate.

The notes come with a conversion price set at $76.44, reflecting a 2% premium over the Thursday closing price. They will be redeemable starting in August 2028, provided the stock price reaches 130% of the conversion price.

The company intends to allocate $6.6 million of the proceeds to capped-call transactions, which are designed to reduce dilution for existing investors. The remaining funds will be used for bitcoin acquisitions and general corporate purposes.

Semler Scientific also reported positive financial results for the fourth quarter, with revenue rising by 3.3% to $12.5 million and operating income increasing by 8.8% to $3.7 million. The company’s bitcoin holdings showed an unrealized gain of about $29 million. As of January 17, Semler holds 2,321 BTC, with an aggregate purchase price of $191.9 million and an average purchase price of $82,689.