Michael Saylor Defines BPS, CEBE Metrics and Debt Amplification Effects
STRC•Michael Saylor introduced BPS (Bitcoin per Share) and CEBE BPS (Conservative Equity Bitcoin per Share) to assess whether a Bitcoin treasury company can outperform Bitcoin itself. He noted that Amplification—the gap between these metrics—arises when firms issue long-duration, low-cost liabilities, enabling upside, while short-duration, high-cost debt risks underperformance.
1. Defining BPS and CEBE BPS
Michael Saylor described BPS as the amount of Bitcoin backing each common share before accounting for debt or preferred equity, and CEBE BPS as the Bitcoin per share after senior claims. BPS represents potential upside tied to Bitcoin’s price, while CEBE BPS serves as a conservative floor for common shareholders.
2. Debt’s Role in Amplification
The difference between BPS and CEBE BPS, termed Amplification, only emerges when a company takes on debt or issues preferred shares. Long-duration, low-cost liabilities can widen Amplification for potential outperformance, whereas short-duration, high-cost debt can narrow it and lead to underperformance.
