Semler Scientific (SMLR), a medical devices manufacturer, saw a significant drop in its stock price after market close on Thursday, falling as much as 15%. The dip followed the company’s announcement that it plans to sell $75 million worth of convertible senior notes, with plans to use part of the funds to expand its bitcoin (BTC) holdings.
The stock fell to a low of $51 and was down about 8% in pre-market trading. The company, based in Santa Clara, California, increased the total offering size to $85 million, adding an additional $15 million in options. These convertible notes, which will mature in 2030, carry an annual interest rate of 4.25%.
The company set the initial conversion price for the notes at $76.44, a 2% premium over its Thursday closing price. The notes are redeemable starting in August 2028 if the stock price reaches 130% of the conversion price.
Semler will allocate $6.6 million of the proceeds toward capped-call transactions to limit equity dilution for existing investors, with the remainder earmarked for increasing its bitcoin holdings and general corporate expenses.
In its earnings report, Semler Scientific posted a 3.3% increase in fourth-quarter revenue, reaching $12.5 million, while operating income rose 8.8% to $3.7 million. The company also reported an unrealized gain of approximately $29 million due to the change in the fair value of its bitcoin holdings. As of January 17, Semler holds 2,321 BTC, with a total purchase price of $191.9 million and an average acquisition price of $82,689.
