Metaplanet, a Japanese treasury company, recently sold 10,000 BTC and repurchased 11,000 BTC at a higher average price. This move was part of an effort to secure a better credit rating and improve access to financing. The company received ¥124.7 billion from the sale and spent ¥149.9 billion on the repurchase, resulting in a price difference of about ¥11.57 billion before transaction costs and potential tax effects. The action demonstrated to creditors that Metaplanet could use its Bitcoin holdings to meet obligations, even though shareholders initially invested for the long-term appreciation of the asset.
Metaplanet's financial strategy highlights the tension between shareholder expectations and creditor demands. Shareholders typically prefer holding Bitcoin for years, anticipating higher prices, while creditors require clear repayment plans with specific deadlines. The company's June financial statement reported ¥67.49 billion in short-term borrowings and ¥8 billion in bonds payable within a year, against minimal cash reserves. This disparity underscores why lenders seek more than just a coin count when assessing repayment capabilities.
Strategy, another Bitcoin-focused company, has built a substantial dollar cushion to manage similar financing challenges. As of October 4, Strategy held a $4.88 billion dedicated reserve and an additional $833.4 million in separate USD cash, totaling approximately $5.71 billion. This reserve supports preferred-stock dividends and debt interest, providing flexibility to avoid selling Bitcoin during market downturns. The company's approach demonstrates how maintaining liquidity can help balance the needs of different stakeholders.
Both Metaplanet and Strategy are exploring ways to generate income beyond holding Bitcoin. Metaplanet's revised allocation policy targets 85% to 90% of assets in Bitcoin and 10% to 15% in strategic investments, including income-producing securities. This strategy aims to earn more from investments than it pays in financing costs, potentially involving investments in preferred securities issued by other Bitcoin treasury companies. However, this approach also introduces risks, as falling Bitcoin prices could reduce asset values and income sources simultaneously.