Bitcoin Per Share: A New Standard for Long-Term Shareholder Value

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Cliff-Notes:

• Public companies are increasingly adopting bitcoin as a treasury reserve asset, creating a new focus on bitcoin per share as a metric of shareholder value.
• Maximizing earnings per share is now complemented by growing bitcoin holdings, offering a hedge against inflation and monetary debasement.
• Companies like Cathedra and Metaplanet are leading the shift, prioritizing sustainable bitcoin accumulation strategies for long-term growth.

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Every day, more companies worldwide decide to hold bitcoin as a treasury reserve asset. A brand new metric to gauge long-term shareholder value has emerged for these companies, operating on a bitcoin standard: BTC per share.

Delivering long-term shareholder value rests not only on profitable growth over a multi-year time horizon but also on effectively capturing that growth in an asset that can retain its value in real terms. Earnings growth is squandered if it sits idly in cash or sovereign debt that yields a low or negative return when adjusted for inflation.

Cathedra Bitcoin, a publicly traded company on the TSX Venture Exchange in Canada, released a memo outlining its pivot to accumulating, preserving, and maximizing per-share bitcoin holdings:

Notably, Cathedra outlines in this memo that bitcoin mining is not a reliable way to grow shareholders' bitcoin per share. As such, it is pivoting the company away from the bitcoin mining business and towards developing and operating data centers. Cathedra is not just passively allocating BTC to their corporate treasury, they are reorienting their business model to one with more sustainable cash flows and returns on capital so that they can acquire more bitcoin, more consistently.

Capital allocation decisions at public companies now have an additional consideration: in addition to maximizing earnings per share as has been a convention since the dawn of corporations, maximizing the profitable acquisition and retention of bitcoin on a per-share basis—not only to retain earnings most effectively but to appreciate in its own right and serve as a hedge for the corporate balance sheet against ruthless monetary debasement.

Cathedra went on to outline its bitcoin allocation strategy, and ended the note with its current BTC metrics. It has 43 bitcoin in reserve, or 5 sats per share—with multiple voting shares considered on an as-converted basis, meaning that Cathedra has different classes of shares (like common shares and voting shares), and the calculation of 5 sats per share takes into account what those voting shares would convert to if they were converted to common shares.

Metaplanet, a publicly traded company listed on the Tokyo Stock Exchange, also took to X yesterday to share its bitcoin per share. CEO Simon Gerovich said:

Proud to share our #Bitcoin per share (in satoshis). Each bar represents our Bitcoin holdings per share, showing a steady increase since our adoption of the Bitcoin standard. Our goal is to keep growing our BTC per share for long-term shareholder value @Metaplanet_JP

Metaplanet's Bitcoin Dashboard has a chart showcasing the company's Bitcoin per share (in Satoshis) over time. Since adopting a Bitcoin Strategy in April and steadily acquiring more throughout the summer, its BPS has more than tripled. Metaplanet's pivot to a bitcoin-centered business has been accompanied by a commensurate focus on building out its bitcoin holdings on a per-share basis:

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Effectively stewarding shareholder capital no longer involves merely optimizing for profitability. Allocating to and preserving bitcoin as a treasury reserve asset is now a primary fiduciary duty of every public company, whether they realize it or not.

Bitcoin is one of the best-performing assets of the last decade, and its absolute scarcity is the hedge against monetary debasement that businesses sorely need in the 21st century, and investors are increasingly demanding exposure to.

You're not only doing a disservice to your employees by scoffing at the prospect of holding BTC on your balance sheet, you're also doing a disservice to your shareholders by knowingly leaving thousands of basis points of capital appreciation on the table.

Michael Saylor continues to understand this, which is why MicroStrategy has announced a proposed private offering of $700 million in convertible senior notes due 2028. The notes are unsecured, senior obligations, convertible into cash, or shares of MicroStrategy's class A stock. The proceeds will be used to redeem $500 million of existing senior secured notes, currently their most expensive debt at 6.125%, and to acquire additional bitcoin.

MicroStrategy has also begun creating a breakdown of how the company’s Bitcoin holdings have grown, and how this growth compares to the shares outstanding to assess the performance impact on shareholders (BTC Yield).

BTC Yield measures the percentage change in the company’s bitcoin holdings relative to the company’s assumed diluted shares outstanding. It helps assess how the company’s strategy of acquiring bitcoin affects shareholder performance.

• For the period July 1, 2024, to September 12, 2024, the company’s BTC Yield was 4.4%.
• For the year January 1, 2024, to September 12, 2024, the BTC Yield was 17.0%.

The increasing trend of companies adopting Bitcoin as a core part of their treasury strategy is transforming how shareholder value is measured. Bitcoin per share (BPS) has become a critical metric, as companies like Cathedra and Metaplanet shift their business models to those that will enable them to accumulate more bitcoin, more consistently.

As more businesses recognize the long-term value of holding bitcoin, not only for growth but also as a hedge against monetary debasement, it's clear that bitcoin is now essential in the modern corporate toolkit. Companies ignoring this shift risk leaving significant value on the table for both their shareholders and their balance sheets.

Final thought: bitcoin is unfazed by those who ignore it, but those who ignore it will have to face the opportunity cost of doing so.

Take it easy,

Joe Consorti

Theya is the world's simplest Bitcoin self-custody solution. With our modular multi-sig vaults, you decide how to hold your keys.

Whether you want all your keys offline, shared custody with trusted contacts, or robust mobile vaults across multiple iPhones, it's Your Keys, Your Bitcoin.

Download Theya on the App Store.