Semler Scientific’s stock experiences a significant decline after market close, despite reporting an increase in revenue and income. The company plans to raise $75 million through a convertible note offering, with a majority of the proceeds going towards adding to its bitcoin holdings.
Semler Scientific’s Stock Plummets After Market Close Due to Convertible Note Offering and Earnings
Revenue and Income Rise Despite Share Price Drop
Semler Scientific shares experienced a significant drop of up to 15% after the market close on Thursday, following the company’s announcement of its first convertible note offering and fourth-quarter earnings highlights. The medical-devices maker plans to raise $75 million through this debt sale, with an option for an additional $15 million.
The majority of the proceeds from the convertible senior notes will be used to add to Semler Scientific’s bitcoin holdings. The company increased the offering size to $85 million, carrying a 4.25% annual interest rate and expiring in 2030. The initial conversion price is set at $76.44, representing a 2% premium over the stock’s closing price on Thursday.
Bitcoin Holdings and Earnings
Semler Scientific holds an impressive 2,321 BTC as of January 17, with an aggregate purchase price of $191.9 million and an average price of $82,689. The company reported a rise in fourth-quarter revenue to $12.5 million from $12.1 million, along with an increase in income from operations to $3.7 million from $3.4 million.
The unrealized gain from the change in fair value of bitcoin holdings was approximately $29 million. Of the proceeds from the convertible note offering, $6.6 million will be used for capped-call transactions that limit existing investors’ equity dilution, while the rest will fund bitcoin acquisitions and general corporate purposes.
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