Semler Scientific Tumbles After Market Close on $75M Convertible Note Offering, Earnings

The analyst who wrote this piece owns shares of Semler Scientific (SMLR).Medical-devices maker Semler Scientific (SMLR) tumbled as much as 15% after the close of U.S. trading on Thursday after saying it plans to sell $75 million of convertible senior notes and will use some of the funds to add to its bitcoin ( BTC ) holdings. The shares dropped as low as $51 as the company also said fourth-quarter revenue rose 3.3% to $12.5 million and income from operations added 8.8% to $3.7 million. The unrealized gain from the change in fair value of bitcoin holdings was about $29 million. A portion of the proceeds from the note sale, which includes an option for another $15 million, will be used to fund capped-call transactions to offset stock dilution from a potential note conversion, the company said. The notes mature in 2030, with interest paid semiannually. They can be converted into cash, company stock or both. Full terms of the offering have not been released. As of Jan. 17, Semler Scientific held 2,321 BTC, with an aggregate purchase price of $191.9 million and an average price of $82,689.