Strive Asset Management (ASST) acquired Semler Scientific (SMLR) in an All-Stock agreement. Although historical, this decision has also drawn attention to what can be a problem for investors evaluating Bitcoin cash companies.
The acquisition was the very first merger between two digital assets (DATS) Treasury vouchers holding Bitcoin, giving the combined company control of more than 10,900 BTCs and increases the value of net assets (NAV) per share, which DAT investors consider as a measure of “yield”.
In a note this week commenting on the acquisition, Greg Cipolaro, World Research Manager in Nydig, argued that the commonly used “MNAV” metrics, defined as a market capitalization divided by the crypto, should be removed from the industry report.
“At best, it’s misleading; at worst, it’s dishonest,” said the company in the note.
Nydig has stressed that it does not take into account operating companies or other assets that a date may have. Most large Bitcoin cash companies operate in fact companies that add value.
Second, Nydig wrote, Mnav often uses “supposed actions in circulation”, which could include a convertible debt which has not complied with the conditions of conversion.
“Converted holders would require species, not actions, in exchange for their debt. It is a much more expensive liabilities for a date than to issue actions,” added the company. “Because the convertible debt is essentially volatility harvest (converts are debt + call options), the date is encouraged to maximize its volatility of actions.”
Currently, Bitcoin cash flow companies listed in balance sheet has more than a million BTC, and many are now negotiated below their MNAV, which could suggest that more acquisitions arrive in the near future.
