Maximizing Bitcoin per Share: A New Corporate Strategy

MicroStrategy, Cathedra Bitcoin and Metaplanet are leading the charge in maximizing bitcoin holdings.

Public companies are increasingly turning to bitcoin (BTC) as a valuable treasury asset, a trend that began when MicroStrategy (MSTR) announced its decision to allocate a portion of its treasury to bitcoin in August 2020. This move has led to an impressive 800% increase in the company's stock value.

According to data from BitcoinTreasuries.net, public companies now hold approximately 354,316 BTC, which constitutes around 1.69% of the total bitcoin supply of 21 million. This large-scale entry into the bitcoin market is sure to have a significant impact on the cryptocurrency's price discovery.

Inspired by MicroStrategy's example, several other companies have followed suit, adopting bitcoin as a treasury asset to diversify their portfolios and protect themselves from inflation. Among the most notable are Metaplanet (3350), Semler Scientific (SMLR) and, most recently, Cathedra Bitcoin (CBIT).

Cathedra Bitcoin, a publicly traded company on the TSX Venture Exchange in Canada, has shifted its focus away from bitcoin mining and toward the development and operation of data centers. This strategic pivot comes in response to the increasing challenges faced by the mining industry due to the bitcoin halving.

The Hashrate index, which tracks bitcoin mining revenue, currently stands at a relatively low 43 (petahash/second) PH/s, with an all-time low of 36 PH/s. This sustained downturn has caused many public miners to struggle in 2024.

In light of these challenges, Cathedra has decided to move away from mining to focus on maximizing bitcoin holdings per share and generating a more sustainable cash flow. This shift will allow the company to continuously acquire more bitcoin, prioritizing long-term growth in its bitcoin holdings over costly operational ventures.

"Going forward, we will make all capital allocation decisions with the intention of maximizing our shareholders’ per-share bitcoin holdings," the company said in a statement.

Another company that is actively engaged in the bitcoin treasury space is Metaplanet, under the leadership of CEO Simon Gerovich. Similar to Cathedra, Metaplanet is also prioritizing growth in its bitcoin holdings.

Gerovich has repeatedly emphasized the company's goal of boosting its bitcoin holdings each month, a strategy that has led to significant gains. Year-to-date, Metaplanet's stock value has increased by 587%, reflecting the market's positive response to its strategic approach.

Meanwhile, MicroStrategy continues to be a pioneer and the most significant participant in the bitcoin treasury space. Under Michael Saylor's leadership, the company is constantly innovating and expanding bitcoin adoption.

On Sept. 18, MicroStrategy announced the pricing of a $875 million convertible senior notes offering, which was upsized from an initial $700 million.

The notes carry a 0.625% interest rate and will mature in 2028. The proceeds from this offering will be used to redeem $500 million in high-interest 6.125% senior secured notes at a redemption price of 103.063% of the principal amount, reducing the company's interest payments.

The remaining funds will be used to buy more bitcoin. The offering also includes an option for initial purchasers to buy up to an additional $135 million in notes.

In a recent 8-K filing, MicroStrategy introduced an innovative concept called "bitcoin yield," which measures the percentage change in the company's bitcoin holdings relative to its assumed diluted shares outstanding, including both Class A and Class B shares.

From January 1 to Sept.12 the company's bitcoin yield was 17%, with a quarter-to-date yield of 4.4%.

According to the MSTR-tracker, the bitcoin per share ratio is currently about 0.0012. This metric suggests that long-term shareholders are experiencing accretive value in their bitcoin holdings.