Investigating Pricing and Process Adequacy in Semler Scientific's Proposed Merger with Strive, Inc.

The proposed merger between Semler Scientific, Inc. (NASDAQ: SMLR) and Strive, Inc. (NASDAQ: ASST) has sparked intense scrutiny over pricing fairness and procedural transparency. While the all-stock transaction offers Semler shareholders a 210% premium—valuing the deal at $1.6 billion—the strategic rationale and governance concerns raise critical questions for investors.

Pricing Fairness: Premium vs. Intrinsic Value

The merger price of $90.52 per share, based on Strive's stock valuation as of September 19, 2025, represents a stark contrast to Semler's recent financial performance. In Q1 2025, Semler reported a net loss of $64.7 million, driven by a $41.8 million unrealized loss on its Bitcoin holdings and a $29.8 million DOJ settlementSemler Scientific® Reports First Quarter 2025 Financial Results^[1]. Despite these challenges, the company's diagnostics business—centered on the FDA-cleared QuantaFlo® system—remains a key asset. Analysts using a 2 Stage Free Cash Flow to Equity model estimated Semler's intrinsic value at $77.86 per share as of 2024, while a mid-2025 valuation placed it at $67.16Estimating The Intrinsic Value Of Semler Scientific, Inc.^[3]. The $90.52 merger price exceeds these estimates, suggesting either a strategic premium for Bitcoin synergies or potential overvaluation.

Strive's rationale hinges on combining its Bitcoin treasury (now 5,886 BTC post-merger) with Semler's 5,021 BTC holdings, creating a corporate entity with over 10,900 BTC—a move that aligns with broader trends of institutional Bitcoin adoptionStrive to Acquire Semler Scientific in a $1.6 Billion All-Stock Deal^[5]. However, this focus on digital assets may overshadow the diagnostics business's profitability. Semler's diagnostics segment, which generated revenue through product sales and service contracts, has not been independently valued in the merger agreementStrive, Inc. (Nasdaq: ASST) and Semler Scientific, Inc. (Nasdaq: SMLR) Announce Merger^[6].

Process Adequacy: Restrictive Terms and Legal Scrutiny

The absence of competitive bidding in the merger process has drawn criticism. According to a report by InsideArbitrage, the agreement includes restrictive provisions that limit Strive's ability to entertain alternative bids, potentially disadvantaging Semler shareholdersStrive to Acquire Semler Scientific in a $1.6 Billion All-Stock Deal^[5]. This lack of a robust auction process raises concerns about whether the board fulfilled its fiduciary duty to secure the best possible consideration.

Legal firms such as Ademi, Halper Sadeh LLC, and Brodsky & Smith have launched investigations into the merger's fairness. Their focus includes evaluating whether the Semler board adequately disclosed risks and whether the 21.05-share exchange ratio fairly reflects the company's valueStrive, Inc. (Nasdaq: ASST) and Semler Scientific, Inc. Announce Bitcoin Treasury Merger^[2]. The SEC filing for the merger outlines customary closing conditions, including shareholder approval and regulatory compliance, but does not address the diagnostics business's valuation methodologySemler Scientific, Inc. 425 Merger Prospectus^[4].

Diagnostics Business Monetization: Uncertain Pathways

The merger announcement highlights plans to explore monetizing or distributing Semler's diagnostics business in the future, with a focus on preventative care and chronic disease detectionStrive, Inc. (Nasdaq: ASST) and Semler Scientific, Inc. Announce Bitcoin Treasury Merger^[2]. However, no specific timelines or valuation frameworks were disclosed. This ambiguity leaves investors questioning how the diagnostics segment's profitability will translate into shareholder value. For context, Semler's diagnostics business has historically contributed to its revenue stream, but its recent performance has been overshadowed by Bitcoin-related lossesSemler Scientific® Reports First Quarter 2025 Financial Results^[1].

Strategic Implications and Investor Takeaways

The merger reflects a dual-pronged strategy: leveraging Bitcoin's appreciation potential while retaining a foothold in healthcare diagnostics. Strive's CEO emphasized the combined entity's ability to expand into preventative healthcare, but the lack of concrete plans for the diagnostics business introduces execution riskStrive to Acquire Semler Scientific in a $1.6 Billion All-Stock Deal^[5].

For investors, the key considerations are:
1. Valuation Discrepancies: The merger price exceeds intrinsic value estimates, necessitating a closer look at Bitcoin's role in the deal's economics.
2. Governance Risks: Restrictive merger terms and the absence of competitive bidding may undermine shareholder interests.
3. Diagnostics Uncertainty: Without a clear monetization plan, the diagnostics business's contribution to long-term value remains speculative.

In conclusion, while the merger offers a substantial premium for Semler shareholders, the lack of transparency in valuation methodology and the absence of competitive bidding warrant caution. Investors should monitor legal developments and the combined company's ability to execute its dual strategy.