Michael Saylor, founder and chairman of Strategy (formerly MicroStrategy), has introduced a new metric to help investors assess the real risk of Bitcoin treasury companies. In a series of posts on X on June 14, Saylor distinguished between Bitcoin Per Share (BPS) and Common Equity Bitcoin Exposure BPS (CEBE BPS). BPS measures Bitcoin per common share before senior claims, while CEBE BPS measures the same after senior claims like debt and preferred stock. He described CEBE as the conservative risk metric and BPS as the common equity growth metric. The difference, which he calls amplification, widens when a company carries more liabilities, potentially boosting returns if Bitcoin grows faster than capital costs but increasing risk otherwise.
CEO Phong Le separately clarified that Strategy’s recent sale of 32 BTC was a test of internal processes, not a sign of cash needs for dividends. The sale occurred between May 26 and May 31, raising about $2.5 million at an average price of $77,135 per BTC. Le said the move helped “inoculate the market” and created tax losses that may offset future taxes. He emphasized that the company does not need to sell Bitcoin to meet cash obligations, citing alternative funding channels like equity and preferred stock tools. Strategy subsequently purchased 1,550 BTC for $101.3 million, boosting its total holdings to 845,256 BTC and cash reserves to $1 billion.
The explanations come as the market scrutinizes Strategy’s Bitcoin treasury model, particularly its preferred stock dividends and potential for forced sales. Le acknowledged a remote “edge case” scenario where a sharp Bitcoin drop and weak share price could force a sale of about $3.5 billion in preferred obligations due in 2028, but noted refinancing or equity conversion are also options. Together, the executives’ comments highlight that liability duration, funding costs, and the gap between BPS and CEBE BPS are now central to evaluating Bitcoin treasury firms.
