Strive CIO: Growth in Bitcoin holdings per share must be evaluated in conjunction with financing costs and capital structure.

November 10 — Ben Werkman, Chief Investment Officer of Bitcoin treasury company Strive, posted that the growth rate of Bitcoin holdings per share is a key metric for measuring the capital allocation efficiency of treasury companies, but it cannot be evaluated in isolation from financing costs and capital structure. When a company's stock price trades at a premium to its Bitcoin net asset value, issuing additional common shares to purchase BTC can increase Bitcoin holdings per share; share buybacks can also improve this metric, but may deplete cash reserves.

Werkman warned that continuously using funds raised from preferred stock financing to repurchase common shares could weaken the asset coverage for preferred stock dividends and harm the interests of preferred stock investors.