🌎 Semler Urges Zoom to Allocate $7.7 Billion to Bitcoin

Chair of Semler Scientific Urges Zoom to Allocate $7.7 Billion to Bitcoin

Eric Semler, Chair of Semler Scientific, has proposed that Zoom Communications allocate its substantial cash reserves to Bitcoin, arguing that this move could stimulate growth and increase shareholder value.

Semler Scientific’s Successful Bitcoin Strategy

According to Semler, his firm’s success with a similar strategy serves as a compelling example. By accumulating 3,192 Bitcoin valued at $305 million, Semler Scientific was able to double its stock price since last year.

Zoom’s Underwhelming Market Performance

Semler characterized Zoom as a “Zombie Zone” company, citing its lackluster market performance. Over the last three years, Zoom’s shares have dropped roughly 40%, underperforming the S&P 500 by approximately 73%. In the last five years, Zoom has lagged the S&P by about 84%.

Despite a forward earnings multiple of 15x and forward EBITDA multiple of 9x, Semler noted that Zoom’s valuation remains low due to stagnant growth. The company holds $7.7 billion in cash, nearly one-third of its $25 billion market cap, with no clear plan for deployment.

Advantages of a Bitcoin Treasury Strategy

Semler argued that adopting a Bitcoin treasury strategy could transform Zoom into one of the largest corporate Bitcoin holders. By leveraging its $2 billion in annualized free cash flow and access to low-cost debt, Zoom could benefit from this strategy. Key advantages include:

Increased shareholder value
Improved market performance
Access to a growing asset class
Potential to stimulate growth

Semler emphasized that Zoom founder and CEO Eric Yuan, who has super-voting shares, holds the power to implement this strategy, despite not having publicly commented on Bitcoin.

Zoom’s stagnant growth and low valuation make it an ideal candidate for a Bitcoin treasury strategy. By allocating its substantial cash reserves to Bitcoin, Zoom can potentially stimulate growth and increase shareholder value.