Michael Saylor, the chairman of Strategy, has clarified how investors should assess risk in Bitcoin treasury companies. He introduced a refined metric called Common Equity Bitcoin Exposure BPS, or CEBE BPS, which he argues provides a clearer picture of shareholder exposure after accounting for senior claims like debt and preferred stock.
In a series of posts on social media platform X, Saylor explained that while Bitcoin Per Share (BPS) calculates Bitcoin holdings before senior obligations, CEBE BPS shows what remains for common shareholders once those claims are settled. He emphasized that CEBE BPS is the more conservative measure for gauging risk, whereas BPS tracks growth in equity value. The BTC Yield, he added, is a separate metric that measures how effectively BPS is being executed over time.
The distinction becomes critical when companies use leverage to acquire Bitcoin. Saylor noted that the duration of liabilities plays a major role: shorter-term debts make CEBE BPS more relevant, while longer-term obligations allow BPS to better reflect potential equity upside. If Bitcoin appreciates faster than the cost of capital, leverage can amplify returns. But if the company relies on expensive or short-term funding, the risk profile shifts dramatically.
This discussion comes after a period of heightened scrutiny for Strategy. In late May, the company sold a small portion of its Bitcoin holdings—32 BTC worth about $2.5 million—its first such sale since December 2022. Although the amount was minimal relative to its total holdings, the move drew attention to the company’s need to manage cash flow and meet preferred stock dividend obligations.
Shortly after, Strategy raised approximately $181 million through share sales and used part of the proceeds to acquire 1,550 Bitcoin for about $101.3 million. The company’s total Bitcoin holdings now stand at 845,256 BTC, with cash reserves reaching about $1 billion. These transactions highlight the delicate balance between using equity and debt to fund Bitcoin purchases.
Saylor’s core message is that CEBE BPS offers a realistic assessment of risk, while BPS points to growth potential. For common shareholders, the key question is whether Bitcoin appreciation will outpace the costs of financing over the entire investment cycle, both in calm and volatile markets. This framework aims to give investors a more nuanced tool for evaluating companies that use Bitcoin as their primary treasury asset.