Shares of Semler Scientific (SMLR) closed at $32.06, well below the implied $86.30 takeout value in its announced all-stock acquisition by Strive (ASST), a discount Benchmark analyst Mark Palmers say reflects both skepticism and opportunity in the emerging bitcoin treasury M&A wave.

Palmer reiterated its buy rating on Semler while trimming his price target on the stock to $86 from $101 to reflect the terms of the Strive deal.

The fixed exchange ratio, 21.05 Strive shares per Semler share, suggests a lucrative arbitrage spread for investors, especially with both boards having approved the deal. Palmer said the market may be underestimating the long-term implications of consolidating bitcoin-heavy balance sheets under a single corporate roof.

Strive, which recently disclosed it holds 5,886 bitcoin, would add Semler’s 5,021 BTC for a combined 10,907 tokens, enough to rank twelfth among public companies holding the cryptocurrency, trailing only Strategy, the report noted.

Importantly, the merger gives Strive not only scale in crypto reserves but also ownership of Semler’s diagnostics business, which it intends to monetize or spin off after the deal closes, Palmer said. That cash-flowing asset base may give Strive more flexibility than pure bitcoin treasury plays.

The transaction marks the first major move in what Benchmark believes will become a broader wave of stock-for-stock bitcoin treasury mergers. By leveraging its own equity, Strive appears to be capturing BTC at favorable prices, using a «preferred-equity-only leverage model» that avoids typical maturity and margin risks associated with debt-based strategies.

However, risks remain. The deal depends on an effective S-4 registration and Semler shareholder approval. Any sharp decline in Strive or the bitcoin price before the vote could pressure deal terms. «If Strive’s share price weakens materially into the vote, the implied value to SMLR drops, possibly inviting renegotiation pressure or widening the arb haircut,» the report added.

SMLR shares are higher by 2.5% premarket to $32.86. ASST is lower by 4.9% to $3.90.

Read more: Bitcoin Treasury Firm Semler Scientific Still Has 3X Upside: Benchmark