Strive Inc. (ASST) and Semler scientific (SMLR) were affected in the stock market. Their share prices declined following the acceptance to sell Semler Scientific to Strive. The acquisition broadens the Bitcoin-specific treasury of Strive but also coincided with the current selling pressure on both shares.
Are Bitcoin Treasury Strategy Hurting Stocks?
Strive Inc. has affirmed in the official statement that it will purchase Semler Scientific in a 100% stock buy. Strive will acquire the 5,048.1 Bitcoin held by Semler, as part of the deal.
The corporation also declared that it has added a fresh 123 BTC to its corporate treasury. After the announcement, the ASST and SMLR stock prices dropped throughout the trading session.
Data by TradingView revealed that ASST dropped by more than 12% and SMLR dropped by close to 10%. The price response implies that the investors are concerned with risks associated with dilution and short-term uncertainty and not the long-term Bitcoin exposure.
Strive (ASST) shares fell as investors reacted to dilution risksThis development reflects recent halts in corporate Bitcoin strategies. A recent example was when a David Beckham-backed company halted its Bitcoin treasury following the pressure of the investors.
The combined business will have 12,797.9 Bitcoin after the acquisition completion. This positions Strive as the eleventh largest corporate holder of Bitcoin in the world. The cumulative Bitcoin holdings would surpass the holdings of Tesla and Trump Media.
Strive Bets on Bitcoin Treasury Model
Strive said the acquisition aligns with its goal of increasing Bitcoin per share over time. The firm describes itself as a Bitcoin treasury company rather than a traditional asset manager.
Management believes Bitcoin-based balance sheets can outperform conventional corporate strategies over long periods. That view has found recent market support, as Bitcoin accumulation lifts stock prices of firms reporting rapid balance sheet expansion
Semler Scientific was among the first U.S. public firms to adopt Bitcoin as a primary treasury asset. The company acquired Bitcoin through equity, debt and operating cash flows. Its business segment is focused on medical devices and diagnostics of chronic diseases.
Strive will monetize the operating business of Semler upon the deal closing. It will also redeem the $100 million convertible note by Semler and a Coinbase loan of $20 million.
These measures are dependent on market requirements and schedule of implementation. The company indicated that it will ensure that its capital structure remain simplified.
Are Bitcoin Treasury Models Resistant to Market Stress?
Bitcoin holdings are being combined via more mergers and expanded treasuries by more publicly traded companies. However, risks remain. This is because Bitcoin treasury companies can be delisted by Nasdaq in case share prices continue to fall over a period of time.
For instance, K Wave Media faces a Nasdaq delisting because of its share performance. Therefore, investors still argue whether this volatility in the short term is worth the strategies.
The market reaction demonstrates that the level of caution is still high. The Bitcoin treasury approaches can strain share values during transition periods. But performance in the long run will be based on the execution of such strategies and Bitcoin market conditions.
Source: https://coingape.com/news/stocks/strive-completes-acquisition-of-bitcoin-treasury-firm-semler/
