Semler Scientific Stock Has 170% Upside Potential After Strive Merger Deal, Says Benchmark

Semler Scientific (SMLR) shares closed at $32.06, significantly below the implied $86.30 acquisition value from its all-stock merger with Strive (ASST). Benchmark analyst Mark Palmer views this discount as reflecting both market skepticism and a potential opportunity within the emerging trend of bitcoin treasury mergers and acquisitions. Palmer reaffirmed his Buy rating on SMLR, although he adjusted his price target down to $86 from $101 to account for the Strive deal's terms. The fixed exchange ratio of 21.05 Strive shares for each Semler share presents a compelling arbitrage opportunity for investors, especially since both companies' boards have approved the transaction. Palmer suggests the market may be overlooking the long-term strategic benefits of combining bitcoin-heavy balance sheets. The merger would consolidate Strive's 5,886 bitcoin with Semler's 5,021 BTC, creating a combined holding of 10,907 BTC, positioning the new entity as the twelfth-largest public company holder of bitcoin. Beyond crypto reserves, the deal grants Strive ownership of Semler's diagnostics business, which is expected to be monetized or spun off post-merger, providing a cash-flowing asset base that offers more flexibility than pure bitcoin treasury plays. Benchmark anticipates this transaction could pioneer a broader wave of stock-for-stock mergers involving bitcoin treasuries. Strive's strategy of using its own equity allows it to acquire BTC at favorable prices through a "preferred-equity-only leverage model," avoiding risks associated with debt. Potential risks include the need for an effective S-4 registration and Semler shareholder approval; a significant drop in Strive's share price or bitcoin's value before the vote could impact the deal's terms. Pre-market, SMLR shares were up 2.5% to $32.86, while ASST shares declined 4.9% to $3.90.