Investing.com -- Shares of Semler Scientific, Inc. (NASDAQ:SMLR) tumbled 15% after the company announced its plans to offer $75.0 million of convertible senior notes in a private offering and revealed select preliminary unaudited fourth quarter 2024 financial results, alongside a significant unrealized gain from its Bitcoin holdings.
The proposed private offering, subject to market and other conditions, involves $75.0 million aggregate principal amount of convertible senior notes due 2030, with an additional purchase option of up to $15.0 million in notes for initial buyers. The interest and conversion rates, alongside repurchase or redemption rights, will be finalized upon the offering's pricing. Semler Scientific has expressed its intention to use the proceeds for general corporate purposes, including Bitcoin acquisitions.
The announcement also coincides with the company's preliminary unaudited financial results for the fourth quarter of 2024, which report revenues ranging from $12.1 million to $12.5 million, income from operations between $3.4 million and $3.7 million, and an impressive unrealized gain from Bitcoin value changes amounting to approximately $28.9 million. Additionally, as of December 31, 2024, Semler Scientific had roughly $9.0 million in cash, restricted cash, and cash equivalents.
CEO Doug Murphy-Chutorian commented on the preliminary results and the company's Bitcoin strategy, stating, "We are pleased to report these preliminary unaudited numbers and significant unrealized gain from our bitcoin holdings. We are excited to continue executing on our bitcoin treasury strategy."
The company's Bitcoin investment includes 2,321 bitcoins, purchased at an average price of $82,689 per bitcoin, totaling an investment of $191.9 million. The final financial figures, subject to the completion of annual audit procedures, will be disclosed after the U.S. financial markets close on Tuesday, February 18, 2025.
Investors appear to be reacting to the potential dilution of shares due to the convertible notes offering, overshadowing the reported gains from Bitcoin investments and preliminary financial results. The full impact of these announcements will likely continue to influence the company's stock performance in the near term.
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