Semler Scientific Studied MicroStrategy's Success Before Adopting Bitcoin Strategy

Purchasing bitcoin for the company balance sheet came following “soul searching” about how to provide value to shareholders, Eric Semler told CoinDesk.

Semler Scientific (SMLR) Chairman Eric Semler has revealed that the medical device manufacturer studied MicroStrategy’s (MSTR) success before adopting its bitcoin strategy.

In an interview with CoinDesk on Tuesday, Semler said that MicroStrategy CEO Michael Saylor’s statements about “zombie companies” with large cash holdings resonated with the board.

“They decided to study MicroStrategy’s success and saw the value in adopting its strategy,” Semler added.

Semler Scientific has so far purchased 929 bitcoins, according to its second-quarter earnings report. The recent decline in the cryptocurrency’s price has trimmed the value of those holdings by about $10 million.

“When you believe in something so strongly and when you have conviction you have to be willing to step up and buy things when they go against you,” Semler said.

“I think that the ultimate test of conviction is whether you will buy something that’s down and that you bought 20% higher.”

Taking another page from the Saylor playbook, Semler has moved to raise money in the capital markets to purchase far larger amounts of bitcoin.

The company filed a $150 million mixed shelf offering in early June and is currently awaiting SEC approval to move forward.

An early bitcoin believerHaving been a professional investor since 1998, Semler met with bitcoin entrepreneurs early on in the cryptocurrency’s life and began personally buying in 2016.

His investment focus had always been on future trends, Semler said, and he liked to look for stocks and companies that could go from small cap to large cap.

“Bitcoin fits into that realm,” he said and in recent years, he realized that the cryptocurrency had shown staying power, specifically during the collapse of Silicon Valley Bank, one of three lenders that succumbed to bank runs in 2023.

All three banks had provided banking services to cryptocurrency firms, which in turn increased uncertainty about the industry.

“Bitcoin’s durability through that crisis impressed me and had an impact on my thinking about it,” Semler recalled.

The ultimate decision to use bitcoin as a treasury reserve was a simple business move, Semler explained.

The company had plenty of free cash on its balance sheet and was generating additional positive cash flow each year – fundamentals that Semler believed his firm wasn’t getting credit for from Wall Street.

“It was the result of a lot of soul searching about how to provide shareholder value,” he said.

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