Strive's acquisition of Semler Scientific triggers turbulence: Bitcoin treasury adjustments and reverse stock split cause ASST stock to plummet 12%
On January 14, asset management firm Strive (ASST) saw its stock price plummet by approximately 12% in a single day. Previously, the company’s shareholders officially approved the all-stock acquisition of Semler Scientific, but the market reacted negatively to key provisions in the merger terms.
According to disclosed information, this acquisition will add 5,048.1 Bitcoins to Strive’s holdings, bringing the company’s total Bitcoin holdings after the merger to 12,797.9, ranking it 11th among publicly listed companies by Bitcoin holdings, surpassing Tesla and Trump Media & Technology Group. Meanwhile, Strive also announced an additional purchase of 123 Bitcoins for about $11.3 million at an average price of $91,561, bringing its pre-merger independent holdings to 7,749.8.
Despite the expansion of Bitcoin reserves, investor focus has shifted to an unexpected capital structure adjustment. Strive plans to implement a 1-for-20 reverse stock split of Class A and Class B common shares after the merger to reduce the number of outstanding shares. Following the announcement, ASST’s stock price briefly dipped to around $0.90, and Semler’s stock also fell nearly 10%.
Strive’s Chief Investment Officer Ben Werkman stated that the purpose of the reverse split is to bring the stock price to a level that meets the participation thresholds of some institutional investors. Since ASST has been trading below $1 for several months, this move is seen as a technical adjustment. However, CEO and Chairman Matt Cole also acknowledged that, from a valuation perspective, this operation does not change the company’s intrinsic value but helps to broaden potential institutional funding sources.
Regarding integration plans, Strive intends to gradually dispose of Semler’s non-core operational assets to repay related debts, including approximately $100 million in convertible bonds and a $20 million loan, to strengthen the post-merger balance sheet.
From a broader market perspective, publicly listed companies employing Bitcoin treasury strategies generally exhibit high volatility. Since announcing its Bitcoin strategy, Strive’s stock price has experienced a short-term increase of over 20 times before falling sharply. Semler and Japan’s Metaplanet have also followed similar paths.
Currently, many digital asset treasury companies have market values below their net crypto asset worth, which somewhat limits their financing capabilities. Mergers and asset integration are becoming important means to expand Bitcoin exposure and optimize structures. Strive stated that it will maintain a lean architecture in the future, focusing on Bitcoin-related business and revenue generation, and continue to strengthen its Bitcoin treasury strategy.