The stock of Strive and Semler drops after a major merger and reverse split

The unintended consequences of Strive’s acquisition of Semler Scientific caused an unexpected market reaction—both companies’ stock prices collapsed and dropped over 10% within just a few days. While the deal was approved by shareholders, the transaction details, especially an aggressive one-to-20 reverse stock split, led to significant shifts in investor sentiment.

The Merger That Will Bring 12,798 Bitcoin to the Combined Company

The all-stock transaction will be groundbreaking for the digital asset landscape. Through the partnership, Strive will receive 5,048 Bitcoin from Semler’s balance sheet, adding to their current holdings. After the merger, the new combined company will hold nearly 12,798 Bitcoin—a figure that positions them at the top of corporate Bitcoin holders worldwide.

For context, this holding surpasses those of Tesla and Trump Media & Technology Group, ranking Strive 11th in the global corporate Bitcoin treasury hierarchy. This positioning plays a significant role in the company’s long-term strategy.

Recently, Strive also purchased an additional 123 Bitcoin at an average price of $91,561 per unit, investing $11.3 million. With Bitcoin’s current price reaching $78.69K, these transactions demonstrate an aggressive market stance.

The Reverse Stock Split and Erosion of Investor Confidence

The key to the price decline is not just the merger—it is the announcement of the one-to-20 reverse stock split that occurred alongside the deal. Every 20 shares become one share in the new structure, aiming to “align the share price with institutional participation standards,” according to Strive’s Chief Investment Officer, Ben Werkman.

However, the strategy had the opposite effect on the market. Strive’s stock, which had been trading below $1 for the past three months, fell an additional 12% after the announcement, reaching a low of $0.90. Semler’s shares, on the other hand, declined nearly 10%.

This phenomenon reflects broader issues in the digital asset treasury sector. Many companies are currently trading at prices below the net asset value of their crypto holdings, limiting their ability to raise new capital.

The Strategic Rationale Behind the Maneuver

Matt Cole, CEO and chairman of Strive, continued to view the reverse split as “meaningless from an valuation perspective.” He explained that the move “opens doors for some institutions to buy” the stock afterward. The logic is simple: a higher share price is more attractive to institutional investors with minimum price requirements.

The merger and stock maneuver reflect increasing pressure for consolidation within the digital asset treasury sector. As investor enthusiasm wanes amid market volatility, mergers and asset roll-ups have become one of the few remaining tools to strengthen operations and gain market visibility.

The Medical Business Pivot and Debt Restructuring Strategy

Beyond Bitcoin accumulation, Strive plans to profit from Semler’s medical diagnostics business—an example of strategic diversification. A more critical detail is the plan to eliminate approximately $120 million of debt associated with Semler, including a $100 million convertible note and a $20 million loan from Coinbase.

The company states it will maintain a lean corporate structure focused on Bitcoin operations and yield generation. Balancing medical business monetization with debt resolution will be crucial to the success of the merger moving forward.

While the market continues to digest the implications of the transaction, Strive’s success depends not only on the evolution of the Bitcoin market but also on their ability to execute complex financial restructuring and corporate strategies underpinning the deal.