Question 1

What is CEBE (Common Equity Bitcoin Exposure)?

Accepted Answer

CEBE measures the Bitcoin exposure available to common shareholders after accounting for senior claims like convertible debt and preferred stock. Unlike BPS (Bitcoin Per Share), CEBE reveals what common shareholders actually own.

Question 2

What is drag in Bitcoin Treasury Company analysis?

Accepted Answer

Drag is the percentage of a company's total Bitcoin holdings that are claimed by senior obligations (convertible notes, preferred stock, etc.) before common shareholders get anything. A company with 20% drag means 20% of its BTC is effectively spoken for by senior claims.

Question 3

What is drag compression?

Accepted Answer

Drag compression is the phenomenon where senior claims (denominated in fiat) shrink as a percentage of total BTC value when Bitcoin's price rises. As BTC appreciates, fixed-dollar obligations become a smaller fraction of the company's Bitcoin stack, naturally benefiting common shareholders.

Question 4

What is CEBE mNAV?

Accepted Answer

CEBE mNAV (multiple to Net Asset Value) measures how much premium or discount investors pay per unit of actual common equity Bitcoin exposure. Unlike standard mNAV which uses total BTC, CEBE mNAV only counts the Bitcoin that belongs to common shareholders after senior claims.

Question 5

How is CEBE different from BPS (Bitcoin Per Share)?

Accepted Answer

BPS tells you how much Bitcoin a company holds per share total. CEBE tells you how much of that Bitcoin actually belongs to common shareholders. A company can have high BPS but low CEBE if significant portions of its Bitcoin are pledged to convertible debt holders or preferred shareholders.

Question 6

Why does capital structure matter for Bitcoin Treasury Companies?

Accepted Answer

Capital structure determines who gets paid first from a company's Bitcoin holdings. Convertible notes, preferred stock, and other senior claims all have priority over common equity. Without analyzing the full capital structure, investors cannot accurately assess their true Bitcoin exposure through common stock ownership.

What CEBE Changes