Jack Mallers just broke with Bitcoin treasury orthodoxy — and took a shot at Michael Saylor in the process.
The brash CEO of XXI Capital, a Bitcoin treasury company, announced that his firm had dropped the Bitcoin-per-share metric that’s been central to the entire treasury trade.
“It’s become clear that the market wants a Bitcoin equity that can do things like get leverage and give maximal exposure to Bitcoin with cash flow without having to dilute common shareholders,” Mallers said on his podcast The Jack Mallers Show on January 19.
The timing is pointed and his words are caustic. Saylor’s Strategy, the world’s largest corporate Bitcoin holder, just raised $2.1 billion to buy more Bitcoin — with 86% coming from dilutive common stock issuance.
The trade, pioneered by Saylor, is living through some dire times. Nearly 40% of treasuries trade below net asset value, while more than 60% of treasuries have bought Bitcoin at higher prices than they are today.
XXI Capital is the third largest corporate Bitcoin holder with 43,514 Bitcoin worth about $3.8 billion. The company is backed by finance heavyweights like Cantor Fitzgerald, Tether, and Japan-based SoftBank.
Bitcoin-per-share tracks how much Bitcoin each shareholder owns. When companies issue new shares to buy more Bitcoin, that number goes down — diluting existing shareholders even as total holdings grow.
Bitcoin-per-share
Mallers didn’t name Strategy explicitly, but the target was clear.
“We’ve seen certain Bitcoin treasury companies have to dilute shareholders to finance themselves,” Mallers said. “We’ve seen certain Bitcoin treasury companies have to sell their Bitcoin.”
Strategy’s latest purchase illustrates Mallers’ criticism. The company raised $1.83 billion by selling over 10 million MSTR shares — direct dilution that reduced per-share Bitcoin ownership.
Strategy’s stock dropped 8% on the announcement and is down 62% in six months.
Cash flow businesses
Mallers says XXI will focus on “maximal exposure to Bitcoin with cash flow without having to dilute common shareholders.”
He didn’t specify exactly how XXI plans to achieve this, saying the company will provide clarity “when the timing is right.”
But removing BTC-per-share reporting is significant. The metric has been the north star for Bitcoin treasuries since Saylor pioneered the model. Strategy repeatedly emphasises its “BTC yield” — the increase in BTC-per-share over time.
Worse than Strategy
Mallers’ criticism of dilution rings hollow given XXI’s own performance, however.
The company’s stock has dropped more than 70% in the past six months — worse than Strategy’s 62% decline.
And while Mallers slams competitors for failing to generate cash flow, XXI has yet to launch a single cash-generating business nine months after promising to do so.
