Model
Strategy Inc (MSTR) · Digital Credit Capital Framework · $1B Authorization
Retirement math at market prices. Claims carried at the stated amount.
Cash used to buy BTC is CEBE-neutral: dollar for dollar, the BTC gained equals the cash offset lost, so the net effect on common equity's Bitcoin position is zero.
Retirement of preferred below par is the only use of a treasury dollar whose accretion is contractual. The discount between market price and $100 face is a direct transfer from the claims stack to common equity, fixed at execution and independent of any market outcome. No other capital allocation produces this.
The issuance rule: equity sold above CEBE mNAV 1.0x adds residual per share. Equity sold below it subtracts.
The mirror: equity repurchased below CEBE NAV per share adds residual per share. Equity repurchased above it subtracts.
Same threshold. Opposite sides. The market price against CEBE NAV per share determines the direction for both.
The accretion from retiring preferred below the stated amount is contractual, and contractual is not the same as unconditional. Two conditions stand behind it, and both are read at execution rather than assumed.
The first is the discount itself. The gain is the spread between the price paid and the stated amount retired, so it exists only while the instrument trades below that amount, and it is fixed at the moment of execution rather than the moment of authorization. A program authorized against a wide discount and drawn against a narrow one captures the narrow one. Nothing in the authorization preserves the spread.
The second is the ranking against the other use of the same treasury dollar. Retirement accretes while the preferred trades below its stated amount. A common repurchase accretes while the common trades below CEBE NAV per share. Those are two thresholds against two different instruments, and each moves on its own. The crossover is where the ranking between them changes hands, and it is not a fixed price. It recomputes with the BTC price and the claims stack, which is why the threshold in the Buyback Mirror above is derived live rather than published as a constant.
Both conditions are read from marks, so both can reverse with no decision taken. A discount that closes removes the retirement case, a common price that rises through CEBE NAV per share removes the buyback case, and a treasury dollar can arrive at a moment when neither use is accretive. This page records what the marks show at the stamp in the header. It does not carry a gain forward on the assumption that a discount persists.
CEBE Framework by @chcbearsfan. cebetracker.io.