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Big gains in Bitcoin are great—unless your company starts drowning.
Matthew Sigel from VanEck warns public companies to pump the brakes.
Many of these firms are raising funds fast to buy Bitcoin through ATM (at-the-market) programs. But if a company’s stock starts matching its net asset value (NAV), they risk watering down their shares instead of adding value.
So far, no one’s dipped below NAV long-term. But Semler Scientific is teetering on the edge.
Semler’s Bitcoin Gamble
Semler bought Bitcoin in May 2024. They’ve stacked up 3,808 BTC—worth over $400 million.
But their stock has dropped 45% this year. Their market cap now sits just above $434 million—barely above their BTC value.
Their mNAV (market cap divided by Bitcoin holdings) is down to 0.821x. That’s not great.
Time for Safeguards
Semler’s strategy? Keep raising cash, buying more BTC. Investors hope crypto lifts their shares.
Sigel says: Not so fast. He recommends halting ATM offerings if mNAV drops below 0.95x for 10 days.
Also, when BTC rises but stock doesn’t? Buy back shares.
If things stay bad, companies might need to rethink the whole BTC play—maybe merge, split up, or even shut it down.
Focus on Growth, Not Bitcoin Size
Sigel’s final advice? Pay executives for company growth, not how much BTC they hoard.
“Trading at NAV means no room for error,” he said. “At that point, you’re not investing—you’re draining shareholders.”
Footnotes:
Net Asset Value (NAV): The total value of a company’s assets minus liabilities.
mNAV: A ratio comparing a company’s market cap to the value of its Bitcoin holdings.
ATM Programs: Methods for public companies to sell new shares quickly to raise funds.
