Adjusted Claims, the layer · Adjusted Claims %, the ratio · MABE, the per-share output, pronounced "maybe" · conversion weight, the section 3.1 parameter
This document publishes the name and method. Computed outputs follow separately, gated on calibration (section 8). Nothing in this document is investment advice; ACP is a valuation construction.
Adjusted Claims % is a valuation-layer object. It answers a question the measurement layer deliberately does not: what is the market-implied and moneyness-weighted burden of the senior claims, as opposed to their standing contractual burden.
The measurement layer (CEBE, Senior Claims %) carries claims at accrued liquidation preference against basic shares: one state of the world per number, no models inside the headline. ACP sits one layer up. It consults market prices and conversion probabilities, and it is labeled as doing so. The two layers are complements. Neither replaces the other, and figures from the two layers are never mixed in a single construction.
RATIFIED 2026-07-26, Bobby Tierney | 1: ACP is a valuation-layer object, published as such, never promoted into the measurement layer or blended with CEBE headline figures.
v1.1 NOTE | The status note above read "ACP is a measurement construction" at publication. Corrected to "valuation construction," which is what this section states and what the layer is. Prior text preserved here per section 9. Implementation review: Adam Livingston, 2026-07-28.
where Adjusted Net Senior Claims replaces each claim's standing value with its adjusted value per section 3, nets cash per the same rule as Senior Claims %, and converts to BTC at spot.
The companion per-share object is MABE, Market-Adjusted Bitcoin Exposure:
The denominator remains basic shares. Adjustment lives entirely on the claims side; the share count is never modeled in this construction. MABE never renders anywhere without CEBE beside it; this is a page invariant of the framework, not a style preference. MABE is pronounced "maybe," a deliberate signal that the figure is a market opinion where CEBE is a measurement.
RATIFIED 2026-07-26, Bobby Tierney | 2: definition as stated; MABE per ratified vocabulary; basic shares retained; no denominator modeling anywhere in this layer.
v1.1 NOTE | The denominator is basic shares plus contractual conversion shares for any claim the adjustment carries as converted (the symmetry rule); no treasury-method dilution, no speculative counts, no market-condition modeling of the share count. Under continuous weighting the same rule generalizes: a claim at weight w contributes w of its contractual conversion shares. Implementation review: Adam Livingston, 2026-07-28.
The canonical method weights each convertible claim continuously by moneyness rather than switching it at a threshold. The claim's adjusted value is:
where w is the conversion weight in [0, 1], a continuous function of the common price relative to the conversion price, calibrated per section 8. Deep out-of-the-money: w near 0. Deep in-the-money: w near 1. In between: a smooth blend with no discontinuity at any price.
The design contrast is stated plainly: a binary toggle reclassifies the entire notional at a single price and can reverse repeatedly; a continuous weight moves proportionally and reverses proportionally. Both respond to price. Only one steps.
Implementation phasing, per the ratified data-layer rulings of 2026-07-14: first published outputs implement the binary special case, w restricted to {0, 1}, via the symmetry_shares rule (full contractual conversion share count for instruments marked below face due to a conversion feature; v1 charge STRK only, 1,402,074 shares). The calibrated continuous weight is the documented successor and replaces the binary case when it clears the section 8 gate. The spec publishes the general object; the outputs walk toward it in stated steps.
RATIFIED 2026-07-26, Bobby Tierney | 3.1: continuous weighting as canonical method; binary symmetry_shares as the ratified v1 implementation; phasing stated in public as written.
v1.1 NOTE | Weight convention, pinned. conversion_weight (w) runs in the probability-of-equity direction: 0 is fully senior, 1 is fully converted. standing_weight is the fraction of the claim remaining senior. The invariant is standing_weight + conversion_weight = 1, and every published figure names which of the two it carries. The four-band schedule published 2026-06-14 on cebetracker.io/claims-grade/ is expressed as standing weight. Implementation review: Adam Livingston, 2026-07-28.
v1.1 NOTE | A four-band step schedule, published 2026-06-14 on the Claims Grade page, is the standing stated prior and joins the calibration study's candidate family as the step-function form.
v1.1 NOTE | conversion_value_to_claimholder includes accrued amounts and current ratchet state as of the mark date. Implementation review: Adam Livingston, 2026-07-28.
Adjusted value is the market's price for the claim where a liquid market exists: market price per share x shares outstanding, floored at zero, capped at the greater of accrued liquidation preference and any contractual ratchet value (a claim cannot exceed what its terms can demand; a below-par market read may sit below standing value).
Where no liquid market exists, the claim carries at standing value and renders "at face, no quote" per the ratified basis convention (VER, EST, face, with band reserved). No mark is ever fabricated.
RATIFIED 2026-07-26, Bobby Tierney | 3.2: market-priced perpetuals with the cap-and-floor stated; illiquid fallback to standing value with flag.
v1.1 NOTE | Quote convention. Every mark is a close or a last trade, and the source is named on every mark. Marks older than the weekly cycle render flagged STALE.
A claim denominated in bitcoin is marked at BTC quantity x spot, never at its fiat issuance print. Such claims do not compress as bitcoin rises, and carrying them at a stale fiat figure misstates both layers. This rule was sharpened by external review from Valentin Kosanovic, credited here, and it applies identically in the measurement layer's btc_claim_static handling.
RATIFIED 2026-07-26, Bobby Tierney | 3.3: BTC-quantity mark rule, Valentin Kosanovic credit as stated.
Carried at standing value (principal plus any contractual accretion). ACP does not mark straight debt to market in v1; traded-debt marks are a possible v2 extension and are out of scope here.
RATIFIED 2026-07-26, Bobby Tierney | 3.4: straight debt at standing value in v1; traded marks explicitly deferred.
v1.1 NOTE | Applying across section 3: ACP inherits CEBE's full netting perimeter, cash and issuer-held instruments. The zero floor is inherited and explicit. Implementation review: Adam Livingston, 2026-07-28.
Identical to Senior Claims %: cash nets against adjusted claims before conversion to BTC. No adjustment is applied to cash.
RATIFIED 2026-07-26, Bobby Tierney | 4: cash rule unchanged from the measurement layer.
As net senior claims approach the value of the bitcoin held, all residual ratios degenerate: per-share residuals approach zero, mNAV-style ratios become unstable, and percentage accretion loses meaning. Below the crossing, ratio comparisons are uninformative in both layers. In that region the well-behaved objects are absolute residual deltas and the break-even price, and readers are directed to those. No ratio published under this framework should be read as meaningful within the degenerate region, and tracker surfaces flag the region where it applies.
Accretion and dilution, in either layer, are arithmetic facts about the residual at a point in time. They are not recommendations to issue, retire, buy, or sell. Forward views, growth assumptions, and capital decisions belong to the decision-maker consuming the figures, not to the figures. Any surface language reading otherwise is a defect to be corrected, not a position of the framework.
ACP consults market prices, and market prices for thin preferred series can be stale, wide, or disorderly. ACP inherits every defect of the prices it consults, which is a further reason it is not the headline.
Actions taken because of a discount can close the discount (a repurchase executed against a below-par read moves the read). Valuation-layer figures are inputs to decisions that change the figures. Noted per the same external review credited in 3.3.
RATIFIED 2026-07-26, Bobby Tierney | 5: all four limitations as stated.
v1.1 NOTE | Break-even under ACP is reported at held-constant marks and weights. The dynamic fixed-point solve is out of scope for v1.
Canonical names: "Adjusted Claims" (the layer), "Adjusted Claims %" (the ratio), "MABE" (the per-share output), "conversion weight" (the 3.1 parameter). Public surfaces never use "drag" (canon: Senior Claims %), never blend adjusted and standing figures in one panel without labeling both, and label every figure in this layer as valuation-layer. MABE never renders without CEBE beside it. The fence banner, verbatim, near the top of any page carrying this layer:
The terminology export at cebetracker.io carries these names from the date of commit. The internal implementation contract (schema, page, write and read paths) is the sibling document to this spec and governs build; this document governs meaning.
RATIFIED 2026-07-26, Bobby Tierney | 6: vocabulary and fence banner as ratified; sibling-document relationship as stated.
ACP is the continuous answer to the binary question issuer constructions have begun asking. A moneyness switch (per-instrument reclassification at a threshold) is a two-state special case of a conversion weight, w restricted to {0, 1}. Publishing the continuous form, dated, states the general object the special cases approximate. No issuer construction is graded by this document; the mapping of issuer metrics to framework objects lives at cebetracker.io/credit/.
RATIFIED 2026-07-26, Bobby Tierney | 7: framing as stated, no grading language.
Name and method publish with this document. The marks-based Adjusted Claims layer (observed market prices for quoted claims, converts at standing value with binary symmetry_shares) is live at cebetracker.io/claims/ and is not gated by this section. What the gate holds is the continuous conversion weight of section 3.1: no computed conversion-weighted figure appears on any tracker surface until the calibration demonstrates, in public, that traded convertible instruments price within stated tolerance of the model's implied values. The calibration write-up, when it ships, will be dated and preserved like everything else.
The first calibration published 2026-07-28 at Calibration 1: Adjusted Claims Conversion Weight and did not clear its stated tolerance; the gate holds. The rulebook for the second attempt publishes at Calibration 2: Pre-Registration.
RATIFIED 2026-07-26, Bobby Tierney | 8: calibration gate as the publication condition for outputs.
Gate status, first calibration run. Calibration Study 1 tested the section 3.1 conversion weight against 41 disclosed convertible fair-value marks and one traded print, with the tolerance stated and ratified before any candidate was scored; its pre-registration ruling log publishes as the companion record. No candidate met the tolerance and the no-pass clause fired, so this gate holds: the continuous conversion weight is not launched and no computed conversion-weighted figure appears on any tracker surface. Calibration 2 carries the same three tolerance numbers, unchanged, against a price map that carries time value.
2026-08-22 NOTE, GATE OPENED | Calibration 2 also failed. Calibration 3 was registered 2026-08-19, scored 2026-08-22 on the sealed confirmation set, and returned ADMITTED on its scored protocol. This gate is open as of 2026-08-22. The paragraph above stands as the record of the first run and is superseded on its gate-status claim only, per section 9. An open gate is a necessary condition and not a sufficient one, and the registration says so in as many words: launch is a separate ratification.
2026-08-24 NOTE, LAUNCH RATIFIED | Launch of the continuous conversion weight was ratified 2026-08-24 as its own decision, effective on deploy. The first and only surface carrying a conversion-weighted figure is the conversion weight, which prices the six MSTR convertible senior notes at a 2026-08-14 mark on the Calibration 3 parameters as registered, with no refit. The admission carries a retirement rule. It retires automatically if confirmation-slice RMSE runs above 5.0 points of face, or mean signed error below negative 5.0 points, on two consecutive filed quarters from the Q3 2026 10-Q onward, and this gate closes with it. The quarterly record is the forward scorecard. Nothing from Calibration D1 launched; its no-pass clause stands and the delivery priors it studies remain display only wherever this document references them.
2026-08-24 NOTE, REFERRED AT LAUNCH | The launch build surfaced five questions this document does not resolve, and each is referred rather than answered. Perpetual convertible preferred, where the section 3.1 phasing says the continuous weight replaces the binary symmetry_shares case but the calibrated construction marks to an investor put that a perpetual does not have. Convertible claims outside the calibration population, where the frozen parameters were fitted on one issuer's notes. Claims that are both convertible and bitcoin-denominated, where sections 3.1 and 3.3 apply at once and this document does not order them. Warrants and share acquisition rights, which are not among the four instrument classes of section 3. And one question that reaches this section directly: section 3.1 defines the adjusted value as a convex combination of standing and conversion value, while Calibration 3 validated a bond price in which w is one term among several, and at the launch mark the two differ by 16.627 points of face in the direction that carries the claim stack lighter. All five are stated in full on the launched surface.
2026-08-25 NOTE, SCOPE RULED | Two of the five close here; the note above stands as the record of what was open at launch. Sourced only. A convertible claim carries the conversion weight when its own volatility input is sourced, and stays at binary carrying otherwise with the state named on the face in the "unweighted, volatility inputs unsourced" register. Two independent grounds, either sufficient. The volatility rules bar surrogates, blending across vendors and carrying a value from one instrument to another, so a second issuer's sigma cannot be proxied from the MSTR surface. And independently, Calibration 3 tested MSTR filed fair values with MSTR-fitted parameters on MSTR-sourced volatility, so running the construction over another issuer's convertible would extend an admission past what it tested rather than launch a calibrated weight. Extension is a defined path: sourced volatility for the issuer plus a dated note where the construction is untested in its inputs alone, and a new registration where it is untested in kind. Registered as R-23.
2026-08-25 NOTE, SHARE DELIVERY OUT OF SCOPE | Share-delivery instruments are out of scope entirely and were never in scope. The conversion weight modifies claim values in the numerator; share-delivery instruments are denominator objects and never enter the numerator under the either-state principle, so there is nothing to weight. Warrants, stock acquisition rights, options, restricted stock units and earnouts are not a population this layer declines to serve, they are not a claim population. The warrants question recorded in the note above is withdrawn rather than answered, and section 3 needs no fifth instrument class to dispose of it. Three referrals remain open: perpetual convertible preferred, the ordering of sections 3.1 and 3.3 for bitcoin-denominated convertibles, and the construction-coherence question.
2026-08-25 NOTE, EXCLUDED BY KIND | The first of those three is not a referral and is closed here. Perpetual convertible preferred is excluded by kind from the conversion-weighted population. The weight of section 3.1 prices the either-state resolution of an instrument that terminates, at an investor put or at a maturity, into one of two outcomes. A perpetual preferred carrying a conversion right never terminates and so never resolves. Its resting state is claim-forever at accrued liquidation preference, which the measurement layer already carries correctly, so nothing is lost by excluding it and something is misstated by including it. Sourcing was never the obstacle: the instrument at issue, MSTR_STRK, sits on the same sourced volatility the weighted notes use, and no volatility figure would change the answer.
2026-08-25 NOTE, POPULATION BY KIND | Following from the above, the weighted population is defined by kind rather than by issuer or by data availability. An instrument is eligible for the conversion weight when it has a terminal resolution date, a put or a maturity at which the either-state outcome is settled. Instruments without one are excluded, permanently and not provisionally, because the exclusion follows from what the instrument is rather than from what is known about it. This sits beside the sourcing rule and does not replace it: eligibility by kind comes first, and sourcing then decides whether an eligible instrument carries a weight today. Registered as R-24. Two referrals remain open, the ordering of sections 3.1 and 3.3 for bitcoin-denominated convertibles, and the construction-coherence question.
2026-08-25 NOTE, COMPANY-LEVEL FIGURE PUBLISHED | With the stack resolved, the company-level Adjusted Claims % and MABE publish at the conversion weight page. Construction per sections 2 and 4: the weighted notes enter at their adjusted values, every other instrument in the stack enters at full claim, cash nets unchanged, and the denominator is basic shares plus w of each weighted claim's contractual conversion shares. MABE renders with CEBE beside it, which is the page invariant of section 2. Canonical CEBE and Senior Claims % are unchanged.
This spec is versioned. Changes arrive as dated revisions with the prior text preserved. Errors route through the public correction log at cebetracker.io/methodology/#changelog, same standard as all tracker figures.
RATIFIED 2026-07-26, Bobby Tierney | 9: versioning and correction policy as stated.