Strive's Reverse Stock Split Strategy Backfires Amid Semler Merger Close

The approved acquisition of Semler Scientific by Strive has left investors reeling after an unexpected one-to-20 reverse stock split announcement sent both companies’ shares tumbling. While the merger itself represents a significant consolidation move in the bitcoin treasury sector, the stock restructuring caught many market participants off guard. Strive shares plunged to $0.90 following the announcement and subsequently traded 12% lower, while Semler shares declined nearly 10%. The sharp sell-off underscores investor concerns about the mechanics of the transaction and what the reverse split signals about the combined company’s future direction.

Bitcoin Holdings Position Strive Among Corporate Giants

The all-stock transaction brings Semler’s substantial 5,048 BTC holdings onto Strive’s balance sheet, creating a merged entity with approximately 12,798 Bitcoin. This positioning places the new company ahead of both Tesla and Trump Media & Technology Group in corporate bitcoin reserves, ranking it 11th globally among institutional holders. The consolidation represents a significant achievement in the digital asset treasury space, particularly as Strive continues its accumulation strategy—having recently purchased 123 BTC for $11.3 million at an average price of $91,561 per coin. Despite this impressive bitcoin positioning, the stock market’s reaction suggests investors are viewing the transaction through a different lens than management intended.

The Reverse Split Debate: Institutional Access vs. Market Skepticism

Management justified the reverse split as necessary to “align share price with institutional participation standards,” according to Strive CIO Ben Werkman. Strive’s stock had been trading below $1 for much of the previous three months, a level that creates barriers for certain institutional investors bound by portfolio guidelines prohibiting sub-dollar stock ownership. CEO Matt Cole characterized the reverse split as “meaningless from a valuation standpoint,” arguing it simply “opens the door for several institutions to be able to buy” the stock subsequently. However, this technical restructuring appears to have generated unintended consequences, with investors interpreting it as a negative signal rather than a neutral accounting maneuver.

Consolidation as a Survival Tool in a Pressured Market

The Strive-Semler merger exemplifies broader consolidation pressures reshaping the digital asset treasury sector. With investor enthusiasm diminished and stock prices compressed, many firms in the space now trade well below the net asset value of their actual crypto holdings. This valuation disconnect limits their capacity to raise capital through equity offerings to expand their bitcoin reserves. The merger and restructuring represent one of the few remaining mechanisms for these firms to scale operations and maintain market relevance. Strive plans to monetize Semler’s medical diagnostics business and retire approximately $120 million in outstanding debt obligations, including a $100 million convertible note and a $20 million Coinbase loan, positioning the combined company to focus on bitcoin operations and yield generation through a streamlined corporate structure.