$MSTR v $SMLR A Bitcoin Battle

Bitcoin Holdings Relative to Market Cap

• MicroStrategy (MSTR):

  • Bitcoin Holdings: 478,740 BTC.

  • Value of BTC: Approximately $47.02 billion (using a BTC price of $98,227 as of early February 21, 2025).

  • Market Cap: Approximately $87.89 billion.

  • BTC-to-Market-Cap Ratio: $47.02 billion / $87.89 billion ≈ 53.5%. This means Bitcoin accounts for about 53.5% of MSTR’s market cap, with the remaining value attributed to its business operations, brand, and speculative premium tied to its Bitcoin strategy.

• Semler Scientific (SMLR):

  • Bitcoin Holdings: 3,192 BTC (as of the Q4 2024 earnings call on February 18, 2025).

  • Value of BTC: Approximately $313.5 million (3,192 × $98,227).

  • Market Cap: Approximately $467.63 million.

  • BTC-to-Market-Cap Ratio: $313.5 million / $467.63 million ≈ 67%. Bitcoin comprises about 67% of SMLR’s market cap, indicating a higher relative dependence on its Bitcoin holdings compared to MSTR.

Analysis: SMLR has a higher BTC-to-market-cap ratio (67% vs. 53.5%), meaning its valuation is more heavily tied to its Bitcoin stash relative to its overall market size. MSTR, despite holding vastly more Bitcoin in absolute terms, has a larger market cap that dilutes the relative weight of its BTC holdings. This suggests SMLR is more leveraged to Bitcoin’s price movements, which could amplify gains (or losses) proportionally more than MSTR.

Profitability

• MicroStrategy (MSTR):

  • Core Business: Historically unprofitable in recent years when excluding Bitcoin-related gains. In Q3 2024, MSTR reported a net loss of $340.2 million, driven by a $412.1 million digital asset impairment loss and a 10.3% year-over-year revenue decline to $116.1 million. Its business intelligence software segment struggles with declining revenue and high operating expenses.

  • Bitcoin Impact: MSTR’s profitability hinges on unrealized gains from Bitcoin appreciation. New accounting rules (effective 2025) allowing mark-to-market valuation of digital assets could flip it to positive earnings, with analysts projecting profitability in 2025 if Bitcoin prices hold or rise. However, without Bitcoin, the underlying business remains a cash burner.

• Semler Scientific (SMLR):

  • Core Business: Profitable and cash-flow positive. In Q4 2024, SMLR reported an operating income of $3.5 million on $12.4 million in revenue, a 40% increase from $2.5 million in Q4 2023, despite an 18% revenue drop. This was achieved through a 29% cut in operating expenses. For the full year, operating income was $19.9 million.

  • Bitcoin Impact: Net income soared to $29.2 million in Q4 2024, boosted by a $28.9 million unrealized gain from Bitcoin’s fair value increase. Unlike MSTR, SMLR’s core medical technology business (centered on QuantaFlo) generates consistent profits, providing a buffer even without Bitcoin gains.

Analysis: SMLR’s core business is fundamentally stronger, delivering consistent operating profitability and positive cash flow, while MSTR’s software business bleeds cash absent Bitcoin gains. SMLR’s profitability is less dependent on Bitcoin, though its BTC holdings significantly enhance its bottom line. MSTR’s larger scale and Bitcoin-driven narrative give it a speculative edge, but its profitability remains contingent on crypto market swings and accounting changes.

Conclusion

• Relativity of Bitcoin Holdings: SMLR looks "stronger" in terms of Bitcoin leverage (67% vs. 53.5%), offering more direct exposure to BTC price movements relative to its size. This makes it a higher-beta play on Bitcoin, potentially more attractive for investors seeking amplified upside (or downside) from crypto.

• Profitability: SMLR is unequivocally stronger. Its profitable core business provides stability and organic cash flow to fund Bitcoin purchases, while MSTR’s unprofitable operations rely heavily on external financing and Bitcoin appreciation.

Overall: SMLR appears stronger when balancing both metrics. Its higher BTC-to-market-cap ratio offers greater Bitcoin exposure per dollar of market cap, and its profitable underlying business provides a safety net MSTR lacks. MSTR’s strength lies in its scale, pioneering status, and massive Bitcoin hoard, but its reliance on BTC gains and a weak core business make it riskier without sustained crypto bullishness. For a more conservative investor valuing operational resilience, SMLR edges out; for a Bitcoin maximalist betting on crypto’s rise, MSTR’s sheer volume might still dominate.