Michael Saylor says this Bitcoin metric shows a treasury’s true risk
MicroStrategy founder and chairman Michael Saylor argued that investors in Bitcoin treasury companies should watch more than one metric to understand exposure and risk. In a series of posts on X on June 14, Saylor distinguished between two key measures: Bitcoin Per Share (BPS) and Common Equity Bitcoin Exposure BPS (CEBE BPS).
What the metrics mean
- BPS: Bitcoin per common share before any senior claims (debt, preferred stock, or other liabilities). Saylor described BPS as the growth metric for common equity.
- CEBE BPS: Bitcoin per common share after senior claims are accounted for. He called CEBE the conservative risk metric.
Saylor emphasized that BTC Yield reflects how well a company is executing on BPS. His aim was to separate “growth math” from balance-sheet risk: BPS shows potential upside for common shareholders if Bitcoin appreciates, while CEBE BPS shows what remains for them once senior claims are satisfied.
Why liability structure matters
Saylor highlighted liability duration and funding costs as central to how these metrics behave:
- Shorter liability duration makes CEBE more important, because claims coming due soon reduce what’s left for common shareholders.
- Longer-duration liabilities make BPS more relevant for measuring equity upside, assuming Bitcoin grows faster than dividend or interest costs.
He also introduced the concept of amplification—the gap between BPS and CEBE BPS. Without debt or preferred stock, BPS and CEBE would be identical and the company’s Bitcoin exposure would look more like an ETF. More liabilities can spread returns if Bitcoin outperforms the cost of capital, but they also magnify downside when liabilities are expensive or short-term. “Not all liabilities are equal,” Saylor wrote, stressing that funding terms are central to any Bitcoin treasury model.
Context: why the timing matters
Saylor’s clarification comes after a period of volatility for MicroStrategy’s Bitcoin treasury approach. The company reportedly sold 32 BTC between May 26 and May 31 at an average price of $77,135, raising about $2.5 million — its first disclosed Bitcoin sale since December 2022. That move focused attention on preferred stock dividends, cash needs, and whether Bitcoin appreciation will outpace funding costs.
MicroStrategy subsequently raised roughly $181 million through MSTR share sales and bought 1,550 BTC for about $101.3 million. The company’s reported figures showed an increase in Bitcoin holdings and cash reserves (the article cites holdings rising to 845,256 BTC and cash to about $1 billion).
Bottom line for investors
Saylor’s message steers investors toward a multi-dimensional view of Bitcoin-treasury firms: total Bitcoin holdings and BPS only tell part of the story. To assess true equity exposure, investors should also consider senior claims, liability duration, and capital costs—CEBE BPS for downside risk, BPS for upside potential, and the gap between them as a measure of leverage and amplification across market cycles.
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