A growing number of public companies have embraced Bitcoin as part of their treasury strategies—but VanEck warns that this bold move could backfire if stock values collapse. In a recent analysis, VanEck’s digital asset research lead highlighted the rising risks of stock dilution and strategic failure if companies fail to implement safeguards.
Companies Could Be Diluting Value Instead of Creating It
As firms continue raising capital through at-the-market (ATM) offerings to buy Bitcoin, a serious risk is emerging:
“If the stock trades at or near net asset value (NAV), continued equity issuance can dilute rather than create shareholder value.”
While no company has sustained a price below its Bitcoin NAV, Semler Scientific Inc. (SMLR) is nearing this critical point. Semler currently holds 3,808 BTC, valued at over $404 million, but its stock has fallen over 45% this year, dragging its market cap to just $434.7 million.
Semler’s Bitcoin Bet Is Under Pressure
Semler, originally a medical technology company, made headlines by becoming a top-15 public Bitcoin holder. However, the strategy may be unraveling. Its market-to-NAV ratio (mNAV) has dropped to around 0.821x, indicating the firm is now trading below the value of its Bitcoin holdings.
“Shareholder value is no longer being created—it’s being extracted,” warned the VanEck analyst.
Call for Safeguards and Strategic Discipline
To address this growing issue, experts recommend that Bitcoin-focused public companies:
- Pause ATM offerings if stock trades below 0.95x NAV for 10 days
- Prioritize buybacks if Bitcoin rises but stock prices lag
- Launch strategic reviews if the NAV discount persists (e.g., consider mergers, spin-offs, or ending BTC buying strategy)
“Companies need to act with discipline while they still have the benefit of optionality,” the report stated.
Executive Pay Should Reflect Shareholder Value, Not BTC Size
One final recommendation: Companies should align executive compensation with growth in NAV per share, not the size of the Bitcoin stack or the number of shares issued. Without this discipline, shareholder dilution becomes extractive rather than strategic.
Conclusion: Bitcoin Strategy Needs Flexibility, Not Blind Commitment
As Bitcoin climbs above $106,000, public companies investing heavily in BTC must balance bullish optimism with corporate accountability. Firms like Semler are a cautionary tale: Bitcoin gains won’t always translate into stock gains—unless managed wisely.
Disclaimer
This content is for informational purposes only and does not constitute financial, investment, or legal advice. Cryptocurrency trading involves risk and may result in financial loss.